= regulatory compliance assistance for Crowdfunding companies in the U.S.
"As equity crowdfunding gets closer to becoming a reality here in the U.S. and continues to grow abroad, platform owners will need to ensure they identify any and all fraudsters, and comply with a number of different regulations. In America, for example, that will mean everything from making sure backers are educated about investing to overseeing the amount of money people pledge so they don't invest more than they are allowed. Though the rules for equity crowdfunding are still being worked out by the S.E.C., a few companies have popped up offering due diligence and regulatory compliance solutions. One such company is ciValidator." (http://www.crowdsourcing.org/editorial/crowdfunding-and-regulatory-compliance-a-discussion-with-civalidators-jeff-crump/23269)
Interview of CEO Jeff Crump conducted by Anton Root of Crowdsourcing.org:
"How did you come up with the idea for ciValidator?
Jeff Crump, president and CEO of ciValidator: My background is in technology and business project management with a strong history working with financial services and banking clients such as Charles Schwab, JPMorgan Chase, ABN AMRO, Wells Fargo and Standard Bank of South Africa. I had been following the crowdfunding market for more than a year when I realized there was a need to provide a service to manage fraud and regulatory compliance in an automated and holistic manner.
Can you give a brief description on the services you offer?
We provide a suite of solutions that are all geared to support the diverse needs of crowdfunding and exempt securities. Our solutions include:
CORE – This is the central single sign-on solution that provides integrated protection against fraud through the combination of device and location risk ratings, identity verification and social trust determination. What is interesting about CORE is that it really is market agnostic. In other words, this combination of capabilities could serve any online company that needs to ensure it is protected from online threats and verify its users are real consumers, not fraudsters.
ciValidator: CP – This feature also supports fraud by monitoring and understanding the behavior of the crowdfunding users across our clients’ portals and platforms, which includes identifying any risk of entrepreneurs that are posting multiple rewards projects, equity issuers that are offering investments across one or more intermediary, and any borrower that is seeking multiple peer-to-peer loans. It also monitors and enforces regulatory limits for equity crowdfunding investor limits based on net income or net worth (once that becomes a reality in the US).
ciValidator: BG – BG stands for background and in the case of current broker-dealers and future equity crowdfunding portals, these intermediaries must comply with the requirement to conduct issuer background checks and securities enforcement regulatory history checks. The background check service is not just limited to the individuals associated with the issuer but the issuer company as well. The nice thing about this capability is that we can do in 24-72 hours what it takes other firms weeks to do. Plus our cost for this service is dramatically less than hiring a legal team to perform the checks.
AIVS – Our Accredited Investor Verification Service is designed to solve a key issue associated with Title II changes from the JOBS Act. As part of the change it will require that intermediaries take “reasonable steps to verify” that a person actually meets the requirements for an accredited investor. Our service not only solves this but by issuing an electronic certificate to each accredited investor they can take this with them from broker to broker without having to prove again and again that they meet the criteria.
CIE – One area of both Title II and Title III that has received little attention is around affirmation of knowledge requirements for investors. This is why we recently launched our Certificate of Investor Education online course. This course only takes 45-90 minutes to complete and both educates the student and performs the verification or affirmation of knowledge. We are exploring some more streamlined options for intermediaries but the net/net is that we are solving for this in an effort to help with regulatory compliance." (http://www.crowdsourcing.org/editorial/crowdfunding-and-regulatory-compliance-a-discussion-with-civalidators-jeff-crump/23269)