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Series 79: Underwriting & New Financing
Series 79 practice questionhardRegulation D

A company is conducting a private placement under Regulation D, Rule 506(c), and is relying on general solicitation. Which verification standard must be met for investors?

  1. AInvestors must self-certify their accredited status with a signed statement only.
  2. BReasonable steps to verify accredited status with objective records✓ Correct answer
  3. COnly non-accredited investors may participate if general solicitation is used.
  4. DThere is no requirement to verify accredited investor status.
Explanation

Why BReasonable steps to verify accredited status with objective records

Rule 506(c) requires issuers to take reasonable steps to verify accredited investor status, not just rely on self-certification. The trap is thinking a signed statement suffices under general solicitation.

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