Author Archives: Andrew Jaffe

Many of my blogs over the past few months have been about keeping your data secure and bad actors from causing you a data breach. If you have been listening, by now all your data should be encrypted, and all your log-ins new and strong.

Today I wish to address one instance when you need to give someone easy access to all your data – Death or Disability. Even if you are a young person, don’t overlook the fact that life is uncertain. A car accident can kill you or put you in medical coma. Without the ability to access your online accounts how can a third party manage your affairs? Giving someone access to your online accounts is a must, and you should address this issue NOW.

If you have a Will, and you should, it speaks at your death concerning the beneficiaries of your assets. One asset many people forget is their online assets. Your Will should contain a clause specifically giving your social media accounts to someone who knows your wishes as to their disposition. ( e.g. Do you want a memorial page on Facebook, or just having your site removed.)

Furthermore, your Last Will and Testament will name an executor to conclude your financial affairs, and divide up your assets. In the old days (like 10 years ago) it was easy for the executor to find your assets. All they had to do was collect your mail for a few months and they would find all your bank accounts, credit card statements, insurance policies, etc.

However, today, with most of us using online statements and payments, it is no easy task for the executor to find your assets because the information is stored in your email accounts. If they cannot access your electronics, particularly your computer and your phone, they are going to have a very hard time finalizing your affairs.

Most of us have many dozens of web sites we access – with many dozens of passwords. I, myself, keep a folder (with an unlikely name) of sites and their associated log-in information. But without being able to log into my computer this information is useless to your executor.

Therefore, I have gone Old School. In a desk drawer I keep an “Open Upon My Death” letter where I have written down the log-ins for my computer and phone, and directed the reader to my log-in folder. For greater security you might consider putting this letter in a safe deposit box.

Please feel free to contact me to discuss these important issues.

The Jumpstart Our Business Startups (JOBS) Act was enacted on April 5, 2012. Title III of the JOBS Act created a new exemption from registration for Internet-based securities offerings of up to $1 million over a 12- month period.

Title III was intended to help small and startup businesses conduct low-dollar capital raises on the Internet. It can be thought of as an Internet-based method of raising seed financing from a broad, mostly retail investor base.

The JOBS Act included a number of investor protection provisions, including investment limitations, issuer disclosure requirements, and a requirement to use regulated intermediaries. As of December 31, 2016, 21 intermediaries have participated in Regulation Crowdfunding offerings, including 13 funding portals and 8 broker-dealers.

The Crowdfunding offering requirements are:
• A given issuer is able to raise up to $1 million across all crowdfunding offerings in a 12- month period. An issuer must raise at least the target amount to receive funds. Crowdfunding securities are generally subject to resale limitations for one year;
• The rules imposed limits on the amount that an investor can invest in all Title III crowdfunding offerings over a 12-month period. Investors with both an annual income and net worth of at least $100,000 can invest up to 10% of the lesser of annual income or net worth, but an investor’s total investment across all Title III offerings may not exceed $100,000 in a 12-month period. Other investors can invest the greater of $2,000 and 5% of the lesser of annual income or net worth;
• Crowdfunding issuers are subject to disclosure requirements at the time of the offering (on Form C), during the offering’s progress and on completion of the offering (on Form C-U) and annually in the form of annual reporting requirements (on Form C-AR). Issuers in larger offerings face additional financial statement requirements – in offerings of over $100,000 in a 12-month period, financial statements must be reviewed by an independent accountant, and in offerings of over $500,000 in a 12-month period (except the issuer’s first offering), financial statements must be audited.
• Crowdfunding securities must be offered through a registered broker-dealer or a registered funding portal, a new intermediary type established by the 2015 rules. These intermediaries are mandated to take measures to reduce the risk of fraud, make required disclosures about issuers available to the public, provide communication channels to permit discussion of offerings on the platform, disclose the compensation received by an intermediary, provide educational materials to investors, and comply with additional requirements related to investor commitments, notices to investors, and maintenance and transmission of funds. Registered funding portals that participate in crowdfunding offerings may engage in a narrower set of activities than broker-dealers.

The SEC has just issued a report on the crowd funding activity in the Title III crowdfunding market for offerings initiated during May 16, 2016-December 31, 2016, which you can read here: https://www.sec.gov/dera/staff-papers/white-papers/RegCF_WhitePaper.pdf.

Please feel free to contact me with questions you may have.