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They require that you're an accredited investor, but later note "This is a good faith requirement, since there is no way for Purism to validate your accredited

They require that you're an accredited investor, but later note "This is a good faith requirement, since there is no way for Purism to validate your accredited investor status". Yikes. This had to go through legal right? I'm gobsmacked that either they or the SEC think that not checking is fine. What happens if Joe Sixpack buys in?

fsflover 5y ago
https://teddit.net/r/Purism/comments/om9za4/email_purism_investment_opportunity/h63c59t/#c https://teddit.net/r/Purism/comments/om9za4/email_purism_inv... My guess, though, is that they might be trying to fall under Rule 504 ... where the disclosure and verification rules are more lax. However you can't fall under Rule 504 if the offer is public ... and I think that having the offer on a publicly accessible website is a violation.
- andreareina 5y ago
  That explains the "this is not a public offering" language. Going to be interesting to see how this turns out.
swiley 5y ago
So can I get in trouble for investing anyway?
OrvalWintermute 5y ago
Many crowdfunding sites also have similar language, as most claims of accredited investor status do not actually require you to prove that status. If Joe Sixpack buys in, and made a false claim, that would be on him/her. Some of the previous requirements around accreditor investor status have changed though https://corpgov.law.harvard.edu/2020/09/18/sec-expands-definition-of-accredited-investor/ https://corpgov.law.harvard.edu/2020/09/18/sec-expands-defin... https://www.sec.gov/news/press-release/2020-191 https://www.sec.gov/news/press-release/2020-191
- thrill 5y ago
  "If Joe Sixpack buys in, and made a false claim, that would be on him/her." You would think that would be the way that it is, but is most assuredly is not.
  - wmf 5y ago
    Yeah, the SEC seems to almost always treat the investor as the victim regardless of intent.
- windthrown 5y ago
  > If Joe Sixpack buys in, and made a false claim, that would be on him/her I doubt the SEC sees it that way. The core purpose of accredited investor requirements is to protect Joe Sixpack from opening themselves up to a bunch of liability.
icedchai 5y ago
Seems normal. I remember signing up for some crowdfunding site about 10 years back, and just checking a box to confirm my accredited status. (I didn't qualify as accredited back then.)
vmception 5y ago
if you have zero people that admitted to being unaccredited investors, then you don't have to verify accredited status and can rely on "self-certification" this is the legal term for the good kind of lying but if you want the badge that says "I'm actually an accredited investor!" there are knowledge tests you can take again instead of purely wealth or income tests
jccooper 5y ago
Self-certification is normal for 506(b) activities (private offerings), but some level of verification is needed for 506(c) ("crowdfunding"). It smells like a 506(c) but they're claiming it's a "friends and family" offering. If it is, then they can do self-certification. I'll presume they have some good reason to believe they can do it this way.

fsflover 5y ago

https://teddit.net/r/Purism/comments/om9za4/email_purism_investment_opportunity/h63c59t/#c https://teddit.net/r/Purism/comments/om9za4/email_purism_inv... My guess, though, is that they might be trying to fall under Rule 504 ... where the disclosure and verification rules are more lax. However you can't fall under Rule 504 if the offer is public ... and I think that having the offer on a publicly accessible website is a violation.

andreareina 5y ago
That explains the "this is not a public offering" language. Going to be interesting to see how this turns out.

swiley 5y ago

So can I get in trouble for investing anyway?

OrvalWintermute 5y ago

Many crowdfunding sites also have similar language, as most claims of accredited investor status do not actually require you to prove that status. If Joe Sixpack buys in, and made a false claim, that would be on him/her. Some of the previous requirements around accreditor investor status have changed though https://corpgov.law.harvard.edu/2020/09/18/sec-expands-definition-of-accredited-investor/ https://corpgov.law.harvard.edu/2020/09/18/sec-expands-defin... https://www.sec.gov/news/press-release/2020-191 https://www.sec.gov/news/press-release/2020-191

thrill 5y ago
"If Joe Sixpack buys in, and made a false claim, that would be on him/her." You would think that would be the way that it is, but is most assuredly is not.
- wmf 5y ago
  Yeah, the SEC seems to almost always treat the investor as the victim regardless of intent.
windthrown 5y ago
> If Joe Sixpack buys in, and made a false claim, that would be on him/her I doubt the SEC sees it that way. The core purpose of accredited investor requirements is to protect Joe Sixpack from opening themselves up to a bunch of liability.

icedchai 5y ago

Seems normal. I remember signing up for some crowdfunding site about 10 years back, and just checking a box to confirm my accredited status. (I didn't qualify as accredited back then.)

vmception 5y ago

if you have zero people that admitted to being unaccredited investors, then you don't have to verify accredited status and can rely on "self-certification" this is the legal term for the good kind of lying but if you want the badge that says "I'm actually an accredited investor!" there are knowledge tests you can take again instead of purely wealth or income tests

jccooper 5y ago

Self-certification is normal for 506(b) activities (private offerings), but some level of verification is needed for 506(c) ("crowdfunding"). It smells like a 506(c) but they're claiming it's a "friends and family" offering. If it is, then they can do self-certification. I'll presume they have some good reason to believe they can do it this way.