Bad Actor Checks & SEC Codes

 

What are Bad Actor Checks?

Prior to listing on StartEngine, every "covered person" of the company and the company itself is required to complete bad actor checks. This requirement is part of the SEC regulations under Rule 503 of Regulation Crowdfunding and Rule 262 of Regulation A. The disqualifying events cover eight classes of court and administrative orders that relate to a person's or entity's history of financial and securities fraud. We have negotiated a preferred rate to obtain the checks from CrowdCheck, the premier third-party due diligence provider for online capital raising. The checks are $65 each and payable prior to completion of the bad actor checks.

"Covered persons" includes all executive officers, directors, and 20% equity holders of the company. If the company is an LLC, then covered persons includes all executive officers, managers, and 20% equity holders.

To order your Bad Actor Checks, which are required before you can go live, please complete this form, and send to a StartEngine team member to submit. You will need to enter in all of this information in the "Team" section of your campaign page to indicate all covered persons.

How do I get my SEC codes?

A CIK code is your company’s distinct fingerprint on the SEC’s filing site EDGAR, and it will be the public number used to track your filings. You will also receive a private code called a CCC code. We use your codes to log into the EDGAR system from your first to final filing, along with any amendments and correspondence that come in between.

It usually takes around 24 hours to receive your codes after applying with the SEC but it can take as long as 5 business days.

To obtain your CIK and CCC codes, please fill out the Form ID. The form must be notarized and uploaded to the EDGAR Filer Management website.

For more information, you can check out "Preparing for an SEC Filing? Don't forget your CIK Codes" at the CrowdCheck blog, which is very useful.

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