The U.S. Securities and Exchange Commission proposed a rule which would
disqualify Regulation D offerings (private placements) if they involve certain "felons or other bad actors." The proposal
is part of the SEC's implementation of the Dodd-Frank Wall Street
The proposed rule would eliminate the Regulation D exemption if the issuer
or any other person covered by the rule had a "disqualifying event."
Such events include criminal convictions, court injunctions and restraining
orders, suspension or expulsion from a self-regulatory organization (like
FINRA), and certain Commission disciplinary orders, among other things.
The Commission is seeking public comments on the proposed rule through
July 14, 2011. To read the SEC's press release, see the text of the
proposed rule, or submit comments, clickhere.