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SEC Details Its Criteria for ‘Bad Actor’ Waivers

Joe Mont | March 16, 2015

Amid the backdrop of a fierce debate among commissioners, the Securities and Exchange Commission’s Division of Corporation Finance has issued new guidance on how and when waivers will be granted for companies that otherwise face an automatic disqualification from certain registration exemptions when raising capital.

Companies that violate federal securities laws or enter into a settlement of SEC charges lose their Regulation A and Regulation D exemptions for Rule 506 and Rule 505 eligible private placements. CorpFin can issue a waiver from those disqualifications, at its discretion, provided that the violations are not related to the offerings. For more than a year, SEC commissioners have been divided over the use of these waivers. Commissioners Michael Piwowar and Daniel...

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