Tuesday, May 31, 2011

Vindication for My Do Not Buy List

Apparently, the SEC agrees with me that Regulation D offerings under Rule 506 are being used by felons and bad actors to raise money from unsuspecting investors. Under Reg D, money can be solicited from up to 35 non-accredited investors and an unlimited amount of accredited investors. These offers are exempt from SEC registration, therefore the potential for misuse exists.

Under the proposed rule, anyone who has had a criminal conviction, court injunction or restraining order would be prohibited from bringing a Reg D offering to investors. I am not sure if the proposed rule goes far enough, however. It seems to me if someone had their securities licenses revoked, then they would fall outside of this proposed rule. Further, what about someone who has been fined in a civil proceeding for previous securities rules violations? They too should be barred from being able to offer Reg D offerings in my opinion.

You can speak up and offer your own opinion at:


Readers of this blog have long been informed about Reg D offerings and their pitfalls for investors. The bottom line is that I do not like them and neither should you, no matter what lies you may hear about how great they are for you.

Be smart out there!