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506 Compliance Report - Bad Actor check

Bad Actor Compliance Report

All Rule 506 deals now require a Bad Actor Check. EarlyIQ Rule 506(d) bad actor compliance reports will reveal if an offering is disqualified from relying on Rule 506(b) and 506(c) of Regulation D, Regulation Crowdfunding as well as Reg A+.

 

Bad Actor Checks-crowdfunding compliance

 

What Does the SEC Require?

The SEC requires Bad Actor Compliance Screens for the following individuals involved in a Rule 506 offering: The issuer and any predecessor of the issuer or affiliated issuer; directors, officers, general partners or managing members of the issuer; beneficial owners of 20% or more of the issuer’s outstanding voting equity securities, any promoter connected with the issuer in any capacity at the time of such sale; compensated solicitors of investors; and general partners, directors, officers or managing members of any such solicitor.

The issuer (or any other person covered by Rule 506(d)) is disqualified if they have a relevant criminal conviction, regulatory or court order or other disqualifying event that occurred on or after September 23, 2013. Events prior to this date will be disclosed, but do not disqualify the issuer.

View Sample Report

How to Comply with Rule 506

EarlyIQ performs what the SEC deems as 'Reasonable Steps' to prevent bad actors from slipping through the cracks. We do a complete check on each qualifying individual. Our checks include:

  • Identity Verification
  • Patriot Act / OFAC database check
  • Criminal Background check
  • SEC Reg D 506(d) Bad Actor Compliance Check (8 sources defined by SEC)
  • Other Regulatory Checks (disclosable, but not disqualifying events)
  • Business Entity Check (for company compliance reports only)

All information that EarlyIQ finds is cleared with the individual team member before it is included in the Bad Actor Compliance Report. Any disputes are thoroughly investigated. This allows our reports to be the most accurate reports available.

 

Bad Actor check sample crowdfunding compliance
Click image above to view sample certificate

 

 

 

 

 

 

Why Check for Bad Actors Through EarlyIQ?

EarlyIQ helps investors, companies, angel groups, hedge funds and online platforms comply with the heightened "bad actor" compliance burden. Our solution is:
 

Easy. Just give us the issuer’s main contact information and we do all the work.

Accurate. Our reports are the most accurate available because and they are “fact checked” by the individual being screened to maintain the highest integrity.

Simple. Company Bad Actor reports are summarized for quick reference. All details are just a click away. Individual Bad Actor screens a summarized in a simple certificate.

Flexible. Platforms can initiate compliance reports via a simple email, or a co-branded solution.

Cost Effective. Because EarlyIQ is automated and efficient, we can offer Bad Actor Checks at the lowest cost in the industry.

Want to know more? Check out our Frequently Asked Questions

 

 

 

 

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