SEC Grants First Rule 506 Bad Actor Waiver

The SEC has granted the first bad actor waiver under Rule 506 to RBS Securities.  RBS pointed out the following to the SEC:

  • The disqualifying judgment arose out of a single offering of residential mortgage-backed securities in 2007.
  • The conduct did not pertain to offerings under Regulation A or D.
  • RBS Securities has taken steps to address the conduct alleged in the complaint. RBS Securities also has taken and will be taking actions reasonably designed to prevent potential violations of Section 17(a)(2) and (3) in connection with disclosures related to, and offer and sale of, residential mortgage-backed securities.
  • The disqualification of RBS Securities and its affiliates from relying on the exemptions available under Regulation A and Rules 505 and 506 of Regulation D would be unduly and disproportionately severe.
  • For a period of five years from the date of the final judgment, RBS Securities will furnish (or cause to be furnished) to each purchaser in a Rule 506 offering that would otherwise be subject to the disqualification under Rule 506(d)( l) as a result of the final judgment, a description in writing of the Final Judgment a reasonable time prior to sale.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Stinson Leonard Street - Dodd-Frank and the Jobs Act | Attorney Advertising

Written by:


Stinson Leonard Street - Dodd-Frank and the Jobs Act on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.