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NES Financial sits down with leading securities attorney and VerifyInvestor.com founder, Jor Law

NES Financial recently entered into an agreement with VerifyInvestor.com to offer the unique online investor verification platform for issuers of securities offerings. We sat down with VerifyInvestor.com’s co-founder, Jor Law, to talk about the benefits of using this platform and what sets it apart in the marketplace.

NES Financial: How long have you been working with the EB-5 program?

Jor Law: I have been involved with EB-5 since 2009. Back then, there were only a few Regional Centers and most people didn’t understand that EB-5 involved “securities” and the SEC. My law firm, Homeier & Law, P.C., has worked on roughly 150 different EB-5 matters since then.

NES Financial: What motivated you to create VerifyInvestor.com?

Jor Law:One of the hot topics in securities law right now is general solicitation in private placement capital raises that the newly enacted JOBS Act allows. Prior to the JOBS Act, you couldn’t generally solicit a private placement. But that changed as of September 23, 2013, and now people are able to legally advertise and generally solicit a securities offering as long as they take certain steps.

As a securities attorney, I’m not so hot on the idea of general solicitation. However, as a businessperson and entrepreneur, the concept excites me. What I realized is that we had a lot of clients that were interested in taking advantage of the JOBS Act and publicly soliciting with their capital raises.

The main problem with general solicitation under the JOBS Act is that all the investors must be verified as “accredited investors.” They cannot just certify themselves as accredited through an investor questionnaire, an investor representation letter, or subscription agreement. Instead, a company that is generally soliciting must take “reasonable steps” to verify that its investors are “accredited investors.” The gold standard was to get an attorney’s letter, but that costs a lot. In general, the marketplace thought compliance would be expensive and burdensome.

In general, Homeier & Law, P.C., doesn’t believe in charging fees where we don’t present value. When our clients expressed a need for the verification services, we told them it wasn’t really cost-effective to have us do it. Unfortunately, the other alternatives in the marketplace were less than ideal.

Needing a solution that I felt comfortable with, I set out to create VerifyInvestor.com as a service that ethical and top law firms would feel comfortable referring. Note that VerifyInvestor.com is not affiliated with Homeier & Law, P.C., (other than the fact that I work with both, and some of my colleagues at Homeier & Law, P.C., might have invested in the new business).

NES Financial: Why is it so important for EB-5 stakeholders to use investor verification services?

Jor Law: Well, it’s required by law if they publicly solicit their capital raise unless they have another exemption that allows them to solicit (but there are often issues with the other exemptions when it comes to public solicitation.) It’s easy to accidentally publicly solicit, and once you do, you can’t undo it. If they take an ad out for their offering in a magazine, newspaper, or online site, that’s public solicitation. If they have a website that is not password protected to solicit investors, that’s public solicitation. If they hand out brochures on their offering at random events, that’s public solicitation. If they get a booth at a conference or host a seminar to solicit investors publicly, well, of course that’s public solicitation. If they have to verify that their investors are accredited, using an investor verification platform is one of the best options to avoid penalties.

NES Financial: What sets VerifyInvestor.com apart from other similar services?

Jor Law:VerifyInvestor.com is built with integrity. I personally managed the production of VerifyInvestor.com with a lot of input from securities law experts and EB-5 industry experts. We worked to address the key pain points. We’re simple and fast – it takes less than 1 minute to sign up, and most investors can go through our workflow in 3-5 minutes. We’re reliable and legally compliant – many law firms have vetted out our system and agreed that it’s airtight. We’re working with some of the largest and most prestigious firms in the world. We are safe and confidential – it’s generally safer to send documents through our system than to entrust even your own lawyer or accountant with the information. We use state of the art encryption technology, undergo daily malware scanning, and take strong precautions to respect and honor the privacy of the information that goes through our system. Finally, we’re inexpensive – we’ve heard of folks in EB-5 paying $1,000 to $2,000 per verification. We’re only around $50 per verification for most EB-5 capital raises.

NES Financial: Why did you choose to partner with NES Financial to offer your unique verification platform?

Jor Law:Partnering with NES Financial was a no brainer for us. VerifyInvestor.com’s product is useful to many industries outside of EB-5. In order for us to comfortably focus on marketing in other industries, we needed a partner with a strong marketing team and a partner with a track record of providing excellent, value-added products with great customer satisfaction. For those of you who have been in the industry, you all know that NES Financial has done a great job (and I’m not just saying that because this is their blog!)

NES Financial: Thank you Jor! We appreciate you taking the time to speak with us.

Jor Law: The pleasure was all mine.

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