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Reasonable Steps

Compliance with regulations including Reg D, 506(d) is critical. The law places responsibility on the issuer raising money under Reg D, 506(b) and (c) to take reasonable steps to prevent Bad Actor participation. While EarlyIQ does not report results of our process to any regulatory agency, nor do we make a final determination around disqualification, we provide visibility to stakeholders as to whether disclosure or disqualification may be required.

business background checks for bad actors

Prevent Bad Actors, Be Compliant

EarlyIQ takes what the SEC deems as 'Reasonable Steps' to prevent bad actors from slipping through the cracks. We do this with our team background check as well as by referencing the following: 

  • Patriot Act / OFAC database check
  • SEC Reg D 506(d) Bad Actor Compliance Check
  • Other Regulatory Checks
  • Reg A+ Compliance

All information that EarlyIQ finds is cleared with the individual team member before it is included in the Diligence Report. any disputes are thoroughly investigated.

Patriot Act Check

One of the many requirements of the USA Patriot Act of 2001 is that financial institutions match their existing and potential customers against the Office of Foreign Control (OFAC) list of suspected terrorists and terrorist organizations. EarlyIQ does that check for you, on all individuals listed on our Diligence Report.

patriot act check for crowdfunding OFAC list check
bad actor check for 506 c reg d SEC

Bad Actor Check

What we're looking for in a Reg D, 506(d) check are Bad Actors as defined by the SEC. This is a requirement for any issuer who intends to raise investment money through a private placement utilizing Reg D, 506(b) or (c). Yep, that's right. All Reg D 506 raises as well as Reg A+ .  We do this by searching for 7 categories of data sources defined in the Reg such as US Postal Service infractions, as well as leveraging information from the Criminal Records Check

Other Regulation

EarlyIQ is continually improving our Diligence Report to provide our stakeholders with the most accurate background information so they can make informed investment decisions. Anything we find during our investigation that doesn't fit into the sections above will show up in this section.  For example, if we find evidence that an attorney has been disbarred or an officer has been prohibited from being an officer of a publicly traded company by the SEC, that information will appear in this section. 

business regulation check



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