Crowd Funding Investor Accredaition

[Account Closed]

I have a friend who invested in a crowdfunding deal and they gave an extension of six months to the developer. This is he interesting part the company that he deals with makes you re-certify you accredited status every 3 months ,if you don't they say they have to refund your investment. My friends question is why re-certify  the principal is late and he does not feel like waiting Is this the way it really works ?

[Ian Ippolito]

I've been doing well. Our baby is sleeping through the night again after being sick, so I'm especially grateful. :-)

I did some research and found out that patch of land uses the "safe harbor"approach, rather than the "principles"approach. If you verify by income, you only have to do it once every tax year. However, if you verify by assets, then you have to go through the credit report cost and rigmarole and it lasts for three months only. They give another option which is to have your lawyer/accountant vouch for you instead. However, it lasts only three months as well. This at least avoids having to do credit report, if you are verifying by income. However, if you are verifying by assets, it really doesn't help. When I asked my own attorney about this, she told me that I would have to pay for the credit report anyway, because she would have a duty to verify before signing off on it.

https://patchofland.com/blog/news-and-press/2014/1...

They do warn in the above that they can close you out of the investment if you don't comply. It looks like they are a bit scared of what the SEC did to another company (which it talks about in the blog posting), and don't want to run afoul of the law.

The blog talks about how they understand it's a pain in the butt. It sounds like the laws need to be really clarified and updated to make this easier.