The Deal: SEC to Consider 'Bad Actor' Rule under JOBS Act
The SEC has scheduled a July 10 meeting to consider whether to adopt rules to eliminate the prohibition against general solicitation and general advertising in private placements and to disqualify securities offerings involving so-called "bad actors."
Paredes, Casey and others argued that many, if not most, investment banks had been parties to enforcement actions brought by the SEC. If banks were subject to the bad actor rule for their past violations, they would be disqualified from arranging private placements under Rule 506 of the Securities Act. That could have chilled capital raising by the small-cap companies that rely on public investments in public equity, or PIPEs, to raise money. Written by Dan Lonkevich