SEC Adopts Bad Actor Disqualifications For Private Placements Under Regulation D

On July 10, the SEC adopted final rule amendments to Regulation D to add "bad boy" disqualifications for issuers, placement agents and others.  The disqualifying events apply to all Rule 506 offerings, whether or not general solicitation is used.  The new rules will go into effect 60 days after their publication in the Federal Register.  Issuers and placement agents involved in Rule 506 offerings should update their diligence, and ask the right questions, to confirm that there are no disqualifying events that could prevent a future offering.  Any disqualifying event that took place prior to the effectiveness of the new rules would need to be disclosed to investors. To read our client alert, please visit: http://www.mofo.com/files/Uploads/Images/130715-Bad-Actor-Disqualifications.pdf.