Reg D Rule 506 Private Offerings: Verifying Accredited Investors and Identifying "Bad Actors"

Navigating New SEC Report on Accredited Investor Definition, Exercising Bad Actor Due Diligence

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, June 22, 2016

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will discuss SEC rules and counsel due diligence in Reg D Rule 506 private offerings regarding the issuer's verification obligations that investors in the offering meet the definition of “accredited investors” and that people associated with issuers and intermediaries are not “bad actors.”


Since Rule 506 was changed in 2013, we have seen new practices in securities offerings to comply with:

  • The issuer's obligation to use reasonable steps to verify that all investors in Rule 506 (c) offerings are accredited investors. How is the inability of investors in Rule 506 (c) offerings to self-certify their accredited investor status affecting capital raising?
  • Rule 506 (d)'s requirement for all Rule 506 offerings that issuers make factual inquiries into whether people associated with the issuer or with deal intermediaries have committed a list of "bad acts."

Listen as our authoritative panel of securities practitioners analyzes SEC rules and counsel due diligence in Reg D Rule 506 private offerings for verifying that investors meet the definition of “accredited investors” and that they are not precluded from participating in the offering by the “bad actors” provisions.



  1. Advertised private placements
    1. Overview of Rule 506(c) exemption
    2. The advertised private placement market
    3. How the issuer verifies that all investors are accredited
    4. December 2015 SEC Report on the Review of the Definition of Accredited Investor
  2. “Bad actor” provisions
    1. Events that will disqualify an issuer from using Rule 506
    2. Effect of previous disqualifying events
    3. How issuers are exercising reasonable care in complying with the bad actor provisions
    4. The waiver process, and selected examples of waivers
    5. Curing the bad actor disqualification


The panel will review these and other key issues:

  • How does the issuer verify that all investors are accredited?
  • What recommendations has the SEC made regarding revisions to the accredited investor definition?
  • What "bad acts" will disqualify an issuer from using Rule 506?
  • What is the waiver process and how can the bad actor disqualification be cured?


Zeoli, Anthony
Anthony J. Zeoli

Freeborn & Peters

Mr. Zeoli is a finance and business attorney concentrating in the areas of securities/crowdfunding, banking and...  |  Read More

Schoenthaler, Vanessa
Vanessa J. Schoenthaler

Sugar Felsenthal Grais & Helsinger

Ms. Schoenthaler focuses her practice on corporate and securities matters with an emphasis on private and...  |  Read More

Verdonik, James
James F. Verdonik

Ward and Smith

Mr. Verdonik is leader of his firm's Securities Practice Group. His practice focuses on corporate and...  |  Read More

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