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CALIFORNIA CORPORATE & SECURITIES LAW

Bad Actor Disqualification And Just How Do You Know Whether A Violation is Scienter-Based?

In a recently issued Compliance & Disclosure Interpretation (Question #260.21), the SEC staff unequivocally stated that “bad actor” disqualification under Rule 506(d)(1)(v) is “triggered only by orders to cease and desist from violations of scienter-based provisions of the federal securities laws, including scienter-based rules.”  In Kid, Did You Ever Go To Court?, I questioned whether the list of…

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SEC’s Bad Actor Rules Roil Opinion Practice

The SEC’s bad actor rules are causing a great deal of consternation amongst lawyers who are being asked to give opinions that the offer and sale of securities do not require registration under the Securities Act of 1933.  Historically, these opinions were usually based (albeit not always explicitly) on the non-exclusive safe harbor of Rule 506.  The addition of bad…

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