Community Round Ventures says it will create a “naughty list” for firms that raised money using Reg CF (Regulation Crowdfunding) that have not filed their mandated Form C-AR [Annual Report].
Form C-AR is mandated for issuers that use the Reg CF securities exemption. The annual report must be filed this week, or these firms will be out of compliance. The Form C-AR is valuable information for investors that have backed these companies, and by pursuing a Reg CF offering, firms have committed to providing this document annually.
As CI has covered in the past, we have been told that a good percentage of Reg CF issuers have failed to file the Form, transgressing the regulations. At the same time, the Securities and Exchange Commission (SEC) has yet to take action against these scofflaws, but this does not mean they won’t pursue enforcement actions against these firms in the future. CI understands the SEC is aware of the issue.
In a newsletter viewed by CI, Community Round Ventures states:
“In an effort to continue to push for investor rights, we will be publishing a comprehensive list of ALL companies that failed to file their annual report. This list will include the company name, CEO name, Linkedin Profile and CEO email address. We will also attempt to include contact information for the SEC, FINRA and members of Congress where investors can direct their concerns about companies not providing the regulatory required filings. Lastly, we will report the non-compliance by platform with a platform ranking of whose issuers are least compliant.”
CI has also covered two firms that can help issuers file the document. Crowdfund Capital Advisors (CCA) recently announced a free guide to completing the document. It is available on the company’s website.
raisepapers, part of KingsCrowd, provides a service to automate much of the filing process. In recent days, the company has been pounding the table that Reg CF issuers must complete the document.
While the SEC has been hesitant to pursue Reg CF issuers that are out of compliance, not too long ago the SEC did take action against Reg A+ issuers that transgressed the rules. So, it is probably only a matter of time before the Commission comes after negligent firms that have used the exemption. Otherwise, you could be facing a more painful penalty.
