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www.TheSecuritiesAttorneys.com
Reg A +
Have You Been a
Bad Boy?
www.TheSecuritiesAttorneys.com
The SEC amended
the “bad actor”
provisions of
Regulation A to
be in line with
Rule 506 of
R...
You cannot use Reg
A if the issuer or
other “covered
persons” have been
convicted of, or are
subject to court or
administr...
Disqualifying events:
1. Criminal
convictions
2. Court injunctions
and restraining
orders
3. Final orders of
certain regul...
4. SEC disciplinary
orders
5. Certain SEC
cease-and-desist
orders
6. Suspension or
expulsion from
SRO membership
or association
with an SRO
member
SRO = Self-
Regulatory
Organization
such as the stock
exchanges and
FINRA
7. Stop orders and
orders suspending the
Regulation A
exemption
8. U.S. Postal Service
false representation
orders
An issuer would not
lose the Regulation
A exemption if it
can show that it did
not know,
and in the exercise
of reasonable
care could not
have known, of
the existence of a
disqualification
The covered persons include managing
members of limited liability
companies; compensated solicitors of
investors; underwri...
www.TheSecuritiesAttorneys.com
and beneficial owners of 20% or more
of the issuer’s outstanding voting
equity securities, ...
www.TheSecuritiesAttorneys.com
Consistent with the bad actor
disqualification rules under Rule
506(d), the final rules als...
www.TheSecuritiesAttorneys.com
(1) final orders and bars of certain state and
other federal regulators, and (2) SEC
cease-...
The order must bar
the covered
person at the time
of filing of the
offering
statement
Disqualified
issuers can
request a waiver
of the
disqualification
from the SEC
www.TheSecuritiesAttorneys.com

Want to know
more? – email
me at John.Lux@
Securities-
Law.info

(240) 200-4529
John E. Lux was in
the top 5% of
authors on
Slideshare in 2014
and has been
quoted by
Bloomberg as an
expert on reverse
me...
www.TheSecuritiesAttorneys.com
This is part of a series on
Regulation A, so be sure to
subscribe here and to learn
more, g...
Disclaimer

This is not legal or
investment advice of any
kind

Seek competent advice
from qualified attorneys
and inves...
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Reg a have you been a bad boy

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http://www.TheSecuritiesAttorneys.com Reg A Have You Been a Bad Boy?
The SEC amended the “bad actor” provisions of Regulation A to be in line with Rule 506 of Regulation D. You cannot use Reg A if the issuer or other “covered persons” have been convicted of, or are subject to court or administrative sanctions, for fraud or other violations.

Disqualifying events: 1. Criminal convictions 2. Court injunctions and restraining orders 3. Final orders of certain regulators 4. SEC disciplinary orders 5. Certain SEC cease-and-desist orders 6. Suspension or expulsion from SRO membership or association with an SRO member (SRO = Self-Regulatory Organization such as the stock exchanges and FINRA) 7. Stop orders and orders suspending the Regulation A exemption 8. U.S. Postal Service false representation orders

An issuer would not lose the Regulation A exemption if it can show that it did not know, and in the exercise of reasonable care could not have known, of the existence of a disqualification.

The covered persons include managing members of limited liability companies; compensated solicitors of investors; underwriters; executive officers and other officers participating in the offering; and beneficial owners of 20% or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power.

Consistent with the bad actor disqualification rules under Rule 506(d), the final rules also include two new disqualification triggers not previously present in Regulation A:
(1) final orders and bars of certain state and other federal regulators, and (2) SEC cease-and-desist orders relating to violations of scienter-based anti-fraud provisions of the federal securities laws or Section 5 of the Securities Act.

The order must bar the covered person at the time of filing of the offering statement.

Disqualified issuers can request a waiver of the disqualification from the SEC.

Want to know more? – email me at John.Lux@ Securities-Law.info (240) 200-4529
John E. Lux was in the top 5% of authors on Slideshare in 2014 and has been quoted by Bloomberg as an expert on reverse mergers
This is part of a series on Regulation A, so be sure to subscribe here and to learn more, go to www. TheSecuritiesAttorneys.com and get a free copy of our book “How to Go Public”
Disclaimer This is not legal or investment advice of any kind Seek competent advice from qualified attorneys and investment bankers Your situation may vary The more you know about finance and business, the more you can profit

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Reg a have you been a bad boy

  1. 1. www.TheSecuritiesAttorneys.com Reg A + Have You Been a Bad Boy?
  2. 2. www.TheSecuritiesAttorneys.com The SEC amended the “bad actor” provisions of Regulation A to be in line with Rule 506 of Regulation D
  3. 3. You cannot use Reg A if the issuer or other “covered persons” have been convicted of, or are subject to court or administrative sanctions, for fraud or other violations
  4. 4. Disqualifying events: 1. Criminal convictions 2. Court injunctions and restraining orders 3. Final orders of certain regulators
  5. 5. 4. SEC disciplinary orders 5. Certain SEC cease-and-desist orders
  6. 6. 6. Suspension or expulsion from SRO membership or association with an SRO member
  7. 7. SRO = Self- Regulatory Organization such as the stock exchanges and FINRA
  8. 8. 7. Stop orders and orders suspending the Regulation A exemption 8. U.S. Postal Service false representation orders
  9. 9. An issuer would not lose the Regulation A exemption if it can show that it did not know,
  10. 10. and in the exercise of reasonable care could not have known, of the existence of a disqualification
  11. 11. The covered persons include managing members of limited liability companies; compensated solicitors of investors; underwriters; executive officers and other officers participating in the offering;
  12. 12. www.TheSecuritiesAttorneys.com and beneficial owners of 20% or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power.
  13. 13. www.TheSecuritiesAttorneys.com Consistent with the bad actor disqualification rules under Rule 506(d), the final rules also include two new disqualification triggers not previously present in Regulation A:
  14. 14. www.TheSecuritiesAttorneys.com (1) final orders and bars of certain state and other federal regulators, and (2) SEC cease-and-desist orders relating to violations of scienter-based anti-fraud provisions of the federal securities laws or Section 5 of the Securities Act
  15. 15. The order must bar the covered person at the time of filing of the offering statement
  16. 16. Disqualified issuers can request a waiver of the disqualification from the SEC
  17. 17. www.TheSecuritiesAttorneys.com  Want to know more? – email me at John.Lux@ Securities- Law.info  (240) 200-4529
  18. 18. John E. Lux was in the top 5% of authors on Slideshare in 2014 and has been quoted by Bloomberg as an expert on reverse mergers
  19. 19. www.TheSecuritiesAttorneys.com This is part of a series on Regulation A, so be sure to subscribe here and to learn more, go to www. TheSecuritiesAttorneys.com and get a free copy of our book “How to Go Public”
  20. 20. Disclaimer  This is not legal or investment advice of any kind  Seek competent advice from qualified attorneys and investment bankers  Your situation may vary  The more you know about finance and business, the more you can profit

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