Mina Mar Group

Simply put general solicitation is an act of marketing capital raise publicly, but things are mot that simple. General solicitation is not precisely defined in statues and rules so Securities and Exchange Commission (SEC) takes case by case approach in case of violation "no general solicitation' requirement of Rule 506(b). It all started with JOBS Act in 2012, with purpose to make securities regulations friendlier form small businesses. General solicitation was banned since 1933 and Securities Act of 1933 in order to protect investors from scams and frauds. The Jobs Act required from SEC to amend existing and create new exemptions that will permit issuers of securities to raise capital without SEC registration. On July 19, 2013 SEC adopted amendments to Rule 506 of Regulation D. Another Rule of the same regulation, 506(b) provided issuer with conditions to rely on in order to met requirements of Section 4(a)(2) of Securities Act that exempts from registration "tr...

On July 10, 2013 the Securities and Exchange Commission adopted bad actor disqualification provision for Rule 506 of Regulation D under Securities Act of 1933, to implement Section 926 of Dodd-Frank Wall Street Reform and Consumer Protection Act. The disqualification and related disclosure provision appear as paragraphs (d) and (e) of Rule 506, of Regulation D. The Bad Actor rule prohibits company (the issuer) to use registration exemption if the issuer or any other associated person has been convicted of or subjected to judicial or regulatory sanctions for certain violation of U.S law. Exemption from registration under Regulation D helps thousand of businesses to raise capital worth billions of dollars. T he “Bad Actor” rule is codified as new paragraphs (d) and (e) to Rule 506.  Rule 506(d) provides that the exemptions in Rule 506(b) and Rule 506(c) are not available if the issuer or any associated person is statutorily disqualified. This includes all of the following: ...