uFundingPortal.com Expelled by FINRA
We are currently investigating allegations made against UFP, LLC (uFundingPortal.com), a Herndon, Virginia-based online crowdfunding portal. FINRA (the Financial Industry Regulatory Authority) brought a regulatory action against UFP, alleging that it:
lacked a reasonable basis for believing that certain companies offering securities through its online crowdfunding portal had complied with applicable regulatory requirements; had reason to believe those companies or their offerings presented the potential for fraud or other investor protection concerns; included on its website issuer communications that it knew or had reason to know contained untrue statements of material facts or were otherwise false or misleading; and did not reasonably supervise the activities of its online crowdfunding portal.
It is believed that this is the first (or one of the first) regulatory actions brought by FINRA against a crownfunding portal. FINRA began regulating crowdfunding portals under new rules that became effective in May 2016.
Specifically, FINRA alleged that uFundingPortal.com reviewed and assisted in the preparation of paperwork filed with the SEC by 16 different issuers that offered securities through the uFundingPortal platform. UFP knew that none of the issuers had filed the required disclosures with the SEC. FINRA alleged that UFP did not have a reasonable basis to believe that the issuers complied with securities regulations.
Moreover, UFP is required to deny issuers its platform if it believes that the issuer or offering presents the potential for fraud or otherwise raises concerns about investor protection. FINRA alleged that UFP did not deny the issuers access to its portal, despite the issuers having impractical business models and over-simplified financial projections.
FINRA expelled uFundingPortal from its membership based on these allegations.
Click to view: UFP FINRA AWC
CONTACT ISRAELS & NEUMAN at (720) 599-3505 if you would like more information on UFP (uFundingPortal.com).
Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.