Rich Uncles, a real estate crowdfunding platform, is taking some heat from the Securities and Exchange Commission (SEC). According to a recent filing with the SEC, Rich Uncles is under investigation by the securities regulator. The investigation may result in significant legal expense too. According to the 10-Q filing;
“The SEC is conducting an investigation related to the advertising and sale of securities by us in connection with the offering. The investigation is a non-public fact finding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, we and certain associates have received and responded to subpoenas from the SEC requesting various documents and other documents related to us and the offering. We have cooperated and intend to continue to cooperate with the SEC in this matter.”
“The SEC’s investigation is ongoing, and we are presently unable to predict its duration, scope or results, or whether the SEC will commence any legal actions or launch additional investigations, inquiries or other actions related thereto. The SEC’s investigation could require significant attention from members of our advisor’s senior management. Legal and other expenses we expect to incur in connection with the SEC’s investigation could become significant. If the SEC or another governmental entity were to commence legal action against us, we could be required to pay significant fines and could become subject to injunctions, a cease and desist order or other equitable remedies, which could have a material adverse effect on our business, financial condition and results of operations.”
The offering in question is the “$1 billion initial public offering of up to 100 million shares of [their] common stock. Rich Uncles reports that as of May 11, 2017, they had received aggregate gross offering proceeds of $51,678,761 in connection with the sale of 5,167,876 shares of common stock, including 93,378 shares of common stock sold under our distribution reinvestment plan for aggregate gross offering proceeds of $933,783.”
That means there were 94,832,124 shares of our common stock remaining available for sale in connection with the offering.
Rich Uncles offers online real estate investments including Reg A+ Tier 2.
Below is a promotion Rich Uncles distributed last year.