Disqualification Provisions

What this video covers

• Why a late Form D filing does not automatically disqualify an issuer, but a court injunction tied to that filing kills the small-offering exemption and both uncapped safe harbors
• The full cast of covered persons under bad-actor disqualification, including 20% voting-power owners, promoters, paid solicitors, and private fund investment managers
• Why directors and executive officers are always covered persons regardless of whether they participate in the offering, while other officers are covered only if they participate
• How lookback periods differ: 10 years for general securities-related criminal convictions, 5 years for issuer felonies and regulatory injunctions or Securities and Exchange Commission cease-and-desist orders, and duration of status for exchange suspensions or bars
• The two separate grandfathering cutoff dates (September 23, 2013 for uncapped safe harbors; January 20, 2017 for the small-offering exemption) and why mandatory written disclosure to investors is still required even for grandfathered events
• Which non-Securities and Exchange Commission orders trigger bad-actor disqualification, including United States Postal Service false representation orders and state insurance or banking fraud final orders
• The two-pronged reasonable care defense and why skipping the factual inquiry destroys it completely