SIE practice questionmediumRegulation D
A broker offers a Regulation D private placement to multiple non-accredited investors, but knowingly misstates the company's financials. Which rule is violated?
- ARegulation A+ reporting
- BOnly the Regulation D filing requirement
- CRule 144 resale restrictions
- DFraudulent misrepresentation under federal securities law✓ Correct answer
Explanation
Why D — Fraudulent misrepresentation under federal securities law
Misstating financials is fraud, which is illegal under all federal securities laws, including Reg D. Reg D and A+ have disclosure, not fraud, standards. Rule 144 covers resales, not initial offerings.
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