Offer Unsuccessful

Offer is being Closed Unsuccessfully #

If an offer fails to reach its minimum funding target, it is considered unsuccessful. The issuer cannot access funds and must refund investors. The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) require the platform to notify investors and update the offering details accordingly.

Regulatory Compliance:

  • SEC Rule 15c2-4 ensures that investor funds in escrow are returned upon an unsuccessful offering ( More on SEC Rule 15c2-4).
  • For Reg CF , Rule 304 requires issuers to notify investors and provide refund timelines if an offering fails to meet funding requirements ( More on SEC Reg CF Rule 304).
  • Reg D issuers must disclose offering failures and refund investors per SEC guidelines ( More on SEC Reg D).

Investor Refund Process & Compliance #

The admin sets the offer status to Unsuccessfully Closed and disables further investments. This action archives the offer and associated investments for compliance and record-keeping.

The platform sends out legally required email notifications to all investors who committed funds to the canceled offer. The message includes:

  • The reason for cancellation
  • The cancellation process overview
  • An estimated refund timeline

For each investor in the canceled offer, the platform updates the investment status to Unsuccessfully Closed, voiding any agreements and removing the investments from active portfolios.

Regulatory Compliance:

  • Refunds must be processed according to the original payment method (ACH, Wire, Electronic Wallet).
  • FINRA Rule 4511 requires records of all canceled transactions and refunds ( More on FINRA Rule 4511).
  • SEC mandates that refund processing times should align with financial institution standards (typically 1-3 business days).

Email Notifications & Security Compliance #

The platform automatically initiates refunds for each canceled investment. The refund process depends on the original payment method (ACH, Dwolla Wallet, etc.). A bank transfer to return the funds to the investor’s original bank account is initiated. This process typically takes 1–3 business days. The legally required email notification informs investors that their funds are being processed.

Once the funds are successfully refunded, the investors receive an additional email confirmation.

Our email-service integrates with a trusted delivery and marketing platform, ensuring security, compliance, and deliverability. It includes robust encryption and regulatory compliance with the Financial Industry Regulatory Authority (FINRA), protecting sensitive financial data and minimizing phishing or email spoofing risks. Additionally, third-party providers handle scalability, uptime, and automation, ensuring timely communication during high-traffic periods and streamlining investor notifications.

By ensuring compliance with SEC, FINRA, and financial transaction regulations, the platform guarantees secure refund processing, investor protection, and full regulatory adherence.

Emails #

investment/unsuccessfully_closed.pug - required by law/SEC

flowchart TD A[Offer and associated investments Statuses Updated to Unsuccessfully Closed] --> B(Further Investments Disabled) B --> C(Investment Status Updated to Cancelled by investor after investment) C --> D([LAW REQUIRED EMAIL : Cancellation Reason]) C --> E(Refunds Initiated Based on Original Payment Methods) E --> F(Refund Processing) F --> G([LAW REQUIRED EMAIL : Refund is being processed]) F --> H(Complete Refund to Original Payment Source) H --> I([EMAIL : Refund is completed]) H --> J(Archive Offer Details for Compliance) J --> K[Update Investor and Platform Records]

Notice: Provider Variability and Compliance Assurance

Please be advised that, depending on customer preferences, the specific providers involved in the investment and related processes, including identity verification, accreditation checks, electronic wallet provision, email communications, and other related services, may vary. However, rest assured that all such providers are carefully selected to meet the highest standards of security, compliance with applicable laws and regulations, and user experience best practices.

Each provider undergoes a rigorous vetting process to ensure they align with our commitment to safeguarding your personal and financial information. We prioritize full adherence to regulatory requirements, ensuring that your investment experience remains secure, compliant, and seamless.

Test Cases

All processes on our platform are thoroughly documented, including detailed test cases, which are especially critical whenever changes are made. Test cases ensure that every feature functions as intended, identify potential issues early, and maintain the platform’s reliability, security, and compliance for our investors.

Related Use-Cases:

Read more on the subject #

Calendar March 17, 2025
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