uFundingPortal, a Regulation CF crowdfunding platform that was, until recently, a regulated and FINRA approved platform has been shut down. Today, the site is gone and has been removed from the list of FINRA approved platforms indicative of some sort of transgression regulators could not tolerate.
In a recent conversation with Sherwood Neiss of Crowdfund Capital Advisors, uFunding had been highlighted as falling far short in transparency needed to effectively list Reg CF offers. Neiss told Crowdfund Insider;
“The other portals have videos, communication channels, social network connectivity, etc. All of these are critically important to the transparency of online finance and Regulation Crowdfunding in particular. These were lacking on uFunding portal.”
On a more positive note, none of the listed companies had been funded as market forces kicked in.
A few days after the conversation with Neiss, it was discovered that uFunding had pulled every single offer. At that time, Crowdfund Insider emailed uFunding for a statement but recieved no response.
Sara Hanks, CEO and founder of CrowdCheck and SEC ACSEC member, has been questioning the viability of the platform for quite some time. Hanks, who has been monitoring all Reg CF offers, stated;
“As part of CrowdCheck’s ongoing Compliance Study we looked at all the companies listed on this site, and found an almost complete failure to follow disclosure and filing requirments.”
Hanks explained that securities regulators are very serious with their responsibilities. And apparently quick to move when issues arise.
“I don’t know whether it was the SEC or FINRA or both working together who decided that this portal should not continue to be involved in this market, assuming that this is a permanent state of affairs. But it does show that the regulators view the role of intermediaries as crucial to crowdfunding’s success and that non-compliance has consequences.”
Crowdfund Insider has reached out to FINRA for additional insight. We will let you know what we learn.