Honeycomb Portal LLC has agreed to pay a fine of $140,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Between March 2021 and January 2023, Honeycomb acted as an intermediary for an issuer (Issuer A) in two Reg CF offerings. A separate funding portal affiliated with Issuer A (Funding Portal A) also performed certain functions in both offerings that are required to be performed only by an intermediary.
Because Honeycomb knew or should have known that the offerings were not conducted exclusively through a single intermediary, as required by Reg CF Rule 100(a)(3), it lacked a reasonable basis to believe that Issuer A complied with the requirements of Reg CF, in violation of Reg CF Rule 301(a) and FINRA Funding Portal Rule 200(a).
In addition, from March 2021 to the present, Honeycomb failed to make and preserve certain electronic communications with Issuer A about the two offerings, in violation of Reg CF Rule 404(a) and FINRA Funding Portal Rule 200(a).
For these violations, Honeycomb was censured, fined $140,000, and has agreed to an undertaking to certify its corrective action.
Honeycomb is a funding portal that acts as an intermediary for crowdfunding securities offerings conducted in reliance on Section 4(a)(6) of the Securities Act of 1933 (Regulation Crowdfunding or Reg CF). It is located in Pittsburgh, PA, and has been a funding portal member of FINRA since December 2017.
