SEC issued a “No Action” letter that basically said that since Lamp Technologies vetted the subscribers to make sure they are accredited investors and it was a password protected website that it was okay to post performance on hedge fund databases. In 1997 Lamp Technologies send a letter asking the SEC whether it was okay to have a database that showed descriptive information about the fund and performance information from the fund managers. There is one exception on where you can post your performance and that is on hedge fund databases as long as they are Lamp Compliant.Ī little history on Lamp Technologies. Hedge fund database needs to be lamp compliant Accredited investors are pre-qualified for the database There are many things that are unclear as to what is permitted under the JOBS act and the requirements for additional compliance.
Verification on net worth, by reviewing specific types of documentation dated within the prior three months, such as bank statements, brokerage statements, and obtaining a written representation from the investor Ī written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney or a certified public accountant stating that they has taken reasonable steps to verify that the investor is an accredited investor within the last three monthsĪgain, with the JOBS Act there are additional regulatory burdens included having to verify investors are accredited Investors as well as there are additional filing and disclosure requirements.
Verification based on income, by reviewing copies of any Internal Revenue Service form that reports income What might be considered “reasonable steps”? You have to take “reasonable steps” to verify that the investors are accredited.
The Jumpstart Our Business Startups or JOBS Act lifted some of the ban on advertising, but it created additional regulatory burden. JOBS Act Lifted some bans on advertising Still requires “Reasonable Steps” verification