BUFFALO, N.Y., July 23, 2013 (GLOBE NEWSWIRE) -- Approximately two weeks ago, the SEC adopted rules lifting the ban on general solicitation in offerings of unregistered securities provided that issuers take "reasonable measures" to verify the accredited status of all investors. The SEC proposed this be accomplished, among other ways, through examination of financial documents to be provided by investors to an issuer.
Last week, Angel Capital Association (ACA), the leading professional and trade association supporting the success of angel investors in high-growth, early-stage ventures, released a statement on the adopted rules and commented that the invasive process of investors turning over sensitive financial information stands to harm angel investment and chill activity in the space.
CrowdBouncer, while highly supportive of the SEC's recent pronouncements, also understands the principal concerns expressed by ACA pertaining to investor privacy and information security. Over the course of the last year, CrowdBouncer has developed an approach specifically to help issuers meet the reasonable steps that must be taken to verify the accredited status of investors without surrendering investors' financial information or documents to the issuer.
Utilizing technologies similar to those widely used by lenders for verifying mortgagor income information as required under the new Dodd-Frank mortgage practices, CrowdBouncer enables investors to sign a consent form that allows it to privately and electronically confirm an investor's income or assets. Through its electronic and end-to-end encrypted process, investors do not turn over sensitive financial documents to issuers or crowdfunding portals. Furthermore, CrowdBouncer stores the accreditation certificate of the investor for use in future transactions, minimizing redundant disclosures, costs and compliance burdens on investors across multiple channels.
"Anticipating a higher burden in Rule 506(c) offerings, we set out to develop an accredited investor verification process that balances investor privacy with compliance under the new rules. Our API provides an automated, low-cost, highly scalable solution that puts investor privacy and information security first," said Bob Carbone, CEO of CrowdBouncer.
"As the first crowdfunding compliance intermediary, CrowdBouncer anticipated the market need and built an API that broker-dealers, crowdfunding portals, and software platforms alike are adopting to meet the need of ensuring investor privacy," said Brian Fending, CTO of CrowdBouncer. "Our cloud-hosted platform meets or exceeds data privacy control standards, and our best-in-breed, secure API makes the process easy to implement."
CrowdBouncer has also developed an API for managing the "investment cap" regulations under Title III of the JOBS Act in a manner that provides an effective and highly scalable solution in a manner that optimizes investor privacy and security.
CrowdBouncer is a Platform-as-a-Service (PaaS) for JOBS Act compliance and back-end transactional processing for equity crowdfunding portals. CrowdBouncer's API-driven solution provides equity crowdfunding portals with tools to institute compliance controls and integrate back-end closing processes. The company was formed in 2012 with assistance and financial backing from The InVentures Group, Inc. and Seed Capital Partners. Intermediaries may contact CrowdBouncer CEO Bob Carbone directly or via their website, www.crowdbouncer.com.
The materials on this document are provided for informational purposes only and do not constitute legal advice. The information is offered only for general informational and educational purposes. It is not offered as and does not constitute legal advice or legal opinions.
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