Last Updated on June 12, 2017 by John Fischer
A private placement offering under Regulation D Rule 506c allows for general solicitation, and that includes telemarketing. As long as you make sure that your potential investor is accredited and has been provided enough information to make an informed decision about your offering. Since general solicitation includes telemarketing, your options for advertising and selling your securities are multiplied significantly, but that doesn’t mean you can afford to let anything slide. In fact, due to the institution of the National Do-Not-Call Registry, you need to make sure that you, or the telemarketing agency you have engaged, are not making any calls to numbers on that registry — otherwise you could risk serious penalties and fines. This post will focus on how you can comply with the Do-Not-Call Registry to make sure nothing slows down the sale of your securities, and to help you avoid any potential violations.
What’s the DNC?
The National Do-Not-Call (DNC) Registry was established by the Federal Trade Commission (FTC) to provide consumers with some control over the amount of telemarketing calls they receive. The FTC is a consumer protection agency, so their goal is to watch out for the consumer without putting a choke hold on the flow of commerce. If you solicit the sale of securities to anyone on the DNC registry without their consent, you are engaging in an illegal action and may be subject to serious penalties. Consumer aggravation toward telemarketers and the companies who employ them is rapidly increasing. Don’t let your company suffer the wrath of an angry consumer who has already registered with the DNC.
If you’re hesitant about these risks, fear not, we’ll inform you of how to comply with these rules and how to take advantage of this kind of solicitation. We have the resources and know-how to help you make a connection with your investors. That’s why it’s important to make sure your offering is applicable under Regulation D Rule 506c, which allows for general solicitation; all other rules require that you maintain a preexisting relationship with your investors. For 506c, however, you need to make sure you’re approaching accredited investors. One of the easiest and safest ways to find an accredited investor is to purchase one of our lead packages. More on that later…
How do I protect my offering?
A seller of securities (you) can gain access to the DNC registry by paying a yearly fee. You will then be provided with a Subscription Account Number (SAN). After receiving your SAN, you can use it to download the portion of the registry which contains the area codes of the investors you’re hoping to reach. Once you have accessed these numbers with your SAN, you are advised to “scrub” your list of any leads that appear on the DNC. This means cleaning your list by taking off all the numbers that are registered DNC. With your scrubbed list in hand, you can start making calls, or turn your list over to a telemarketing agency to make the calls for you.
Is it really that important?
YES. DNC violations are all too common and too expensive to ignore. Just this past May, the FCC released a statement concerning a huge settlement paid out by Sprint for not honoring consumer DNC requests. This case was of special note because of the record size of the settlement: $7.5 million. In order to ensure future compliance, Sprint committed to setting up a whole array of new compliance procedures; and you’d better believe that they’ll continue to pay to make certain that their compliance promises are met.
Don’t let this happen to you. Protect yourself and your company from compliance violations. We can be your guide to getting a SAN and setting your company on the course for compliance. You can purchase our investor lead lists without getting a SAN, but why take the chance? Let us be an asset that you can use to your advantage. We can walk you through the process of applying for your SAN, receiving the proper numbers, so you can have everything you need to start scrubbing your own list and making calls. Make us your first call to ensure that all the calls that follow are successful.