Recently, the Division of Corporate Finance of the Securities and Exchange Commission issued questions and answers (“Q&A”) with respect to certain aspects of the bad actor provisions of Rule 506(d) under the Securities Act of 1933. As discussed in our August 2013 memorandum, Rule 506(d) disqualifies securities offerings involving certain bad actors from reliance on the Rule 506 offering exemption. The relevant questions are Questions 260.14 – 260.27 and may be accessed here. The Q&A addresses, among other items: (i) the scope and definition of an “affiliated issuer”, (ii) orders to cease and desist from future violations of non-scienter based rules and (iii) disclosure obligations related to multiple compensated solicitors.
If you have any questions regarding the information discussed above, please contact your Investment Management Group attorney at Seward & Kissel LLP.
