{"id":364,"date":"2014-03-13T12:11:12","date_gmt":"2014-03-13T17:11:12","guid":{"rendered":"http:\/\/www.accreditedinvestorleads.com\/?p=364"},"modified":"2020-01-21T13:23:58","modified_gmt":"2020-01-21T17:23:58","slug":"verifying-accredited-investors","status":"publish","type":"post","link":"https:\/\/www.accreditedinvestorleads.com\/verifying-accredited-investors\/","title":{"rendered":"Protecting Investor Privacy While Verifying Accredited Investors"},"content":{"rendered":"

Regulation D of the Securities and Exchange Act of 1933 makes it possible to raise capital through the sale of shares, units etc. while verifying accredited investors without officially registering the offering with the SEC.\u00a0 Limited disclosure requirements make it easier to raise money in a private offering, and the private placement industry raises more capital on an annual basis than the stock market.<\/p>\n

Recently, the SEC lifted the ban on general solicitation and made it possible for companies to advertise their private offering using Rule 506(c).\u00a0 Simultaneously they also changed the requirements for verifying investors.\u00a0 Rule 506(c) says that you can advertise your offering as long as you only accept money from accredited investors.<\/p>\n

In the past, the SEC allowed investors to \u201cself-certify\u201d.\u00a0 They could check a box and sign a form saying that they were accredited investors.\u00a0 Per the changes to Rule 506, this is no longer an option.\u00a0 Now, the company receiving the funds must take \u201creasonable steps\u201d with verifying accredited investors.<\/p>\n

These reasonable steps may include:<\/p>\n