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Brief Tips on Compliance Issues for Regional Center Websites

Kate Kalmykov

by Dillon Colucci and Kate Kalmykov

There has been much made recently about the government using publicly available sources of information, such as a regional center’s website, to review whether the regional center is complying with applicable U.S. laws. While a website for a regional center is a must to allow prospective investors the ability to use the internet to research their investment, regional center websites must be wary of complying with applicable U.S. laws.  In fact, active regional centers regularly report that officials from various government agencies, including the Securities and Exchange Commission, have reviewed their websites in recent months. With this in mind, we have listed some helpful tips to ensuring that a regional center website is in compliance with U.S. laws:

 

  • Set up investor only areas: A crucial compliance measure is ensuring websites do not engage in general solicitation that violates U.S. federal and state securities laws. This can be accomplished by setting up a privacy screen that requires website visitors to answer questions before they can access certain areas of your site.
  • Monitor use: This is a critical step website operators should be adept at utilizing. Website operators should work with their internet service providers, domain-service providers and any SEO companies they have engaged to review the details of traffic hitting various pages of their website.
  • Beware of hyperlinks: According to SEC guidance, a company can be liable for third-party information to which it hyperlinks from its website under certain circumstances. Therefore, it may be prudent to include disclaimers before or after a visitor clicks on a hyperlink from your website or an “exit notice” when a hyperlink navigates away from your website.
  • Proper use of disclaimers: Without overloading your website with annoying fine-print or capitalized disclaimers, it may be prudent to use an “entry notice” containing the required information which a visitor must affirmatively click through in order to visit any area of your website.

 

This is not an exhaustive list and the breadth of state and federal laws requires a prudent regional center website operator to seek advice from its own counsel before implementing any of these tips.

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