BAD ACTOR QUESTIONNAIRE Clause Samples
The Bad Actor Questionnaire clause is designed to identify whether any individuals associated with a company or offering have engaged in disqualifying activities that would prevent them from participating in certain securities offerings. Typically, this clause requires directors, officers, and significant stakeholders to disclose any past criminal convictions, regulatory sanctions, or other 'bad actor' events. By collecting this information, the clause helps ensure compliance with securities regulations and protects the company from inadvertently involving disqualified persons, thereby reducing legal and regulatory risk.
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BAD ACTOR QUESTIONNAIRE. 1. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?
a) If your answer to Question 1 was “yes”, was the conviction related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the Securities and Exchange Commission (the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ☐ No ☐ 1 Please follow these guidelines in calculating the value of your principal residence: (i) you may not include equity in your principal residence as an asset; (ii) you may exclude indebtedness that is secured by your primary residence, up to the estimated fair market value of the primary residence on the date hereof from the calculation of liabilities (unless the amount of such indebtedness outstanding on the date hereof exceeds the amount outstanding 60 days before the date hereof, other than as a result of the acquisition of the primary residence, in which case the excess should be included in the calculation of liabilities); and (iii) you should include indebtedness that is secured by your principal residence in excess of the fair market value of the primary residence on the date hereof in the calculation of liabilities.
2. Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?
a) If your answer to Question 2 was “yes”, does the court injunction or restraining order currently restrain or enjoin you from engaging or continuing to engage in any conduct or practice related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ☐ No ☐
3. Are you subject to any final order2 of any governmental commission, authority, agency or officer3(2) related to any securities, insurance or banking matter? Yes ☐ (If yes, please continue to Question 3.a) No ☐ (If no, please continue to Question 4)
a) If your answer to Question 3 was “yes”:
i) Does the order currently bar you from: (i) associating with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities? Yes ☐ No ...
BAD ACTOR QUESTIONNAIRE. 1. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?
a) If your answer to Question 1 was “yes”, was the conviction related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the Securities and Exchange Commission (the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ¨ No ¨
2. Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?
a) If your answer to Question 2 was “yes”, does the court injunction or restraining order currently restrain or enjoin you from engaging or continuing to engage in any conduct or practice related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ¨ No ¨
3. Are you subject to any final order 1 of any governmental commission, authority, agency or officer 2 (2) related to any securities, insurance or banking matter?
1 A “final order” is defined under Rule 501(g) as a written directive or declaratory statement issued by a federal or state agency described in Rule 506(d)(1)(iii) under applicable statutory authority that provides for notice and an opportunity for a hearing, and that constitutes a final disposition or action by such federal or state agency.
BAD ACTOR QUESTIONNAIRE. If applicable, subscribers must read carefully, complete and sign the “Bad Actor” Questionnaire attached as Exhibit B. Rule 506 of Regulation D, promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Act, provides an exemption from the registration requirements of the Securities Act for offerings made to “Accredited Investors.” That exemption, however, is not available where any person participating in the offering is disqualified due to specified past misconduct. The “Bad Actor” Questionnaire aims to determine whether any person responsible for the Offering described is so disqualified. The Company and its counsel will rely on your answers in determining whether an exemption is available for the Offering. Please follow the instructions to the “Bad Actor” Questionnaire. If you have questions concerning any of the information called for, you may ask your lawyer, accountant, or the Company for assistance.
BAD ACTOR QUESTIONNAIRE. You must fill out Part B of the only if one following categories applies to you in connection with the offer and sale of the Securities by the Corporation (the “Offering”). • any director, executive officer, other officer participating in the Offering; • general partner or managing member of the Corporation; • any beneficial owner of 20% of more of the Corporation’s outstanding voting equity securities, calculated on the basis of voting power; • any promoter connected with the Corporation in any capacity at the time of such sale; • any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the Offering; • any general partner or managing member of any such investment manager or solicitor; or • any director, executive officer or other officer participating in the Offering of any such investment manager or solicitor or general partner or managing member of such investment manager or solicitor.
1. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?
a) If your answer to Question 1 was “yes”, was the conviction related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the Securities and Exchange Commission (the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ¨ No ¨
2. Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?
a) If your answer to Question 2 was “yes”, does the court injunction or restraining order currently restrain or enjoin you from engaging or continuing to engage in any conduct or practice related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes ¨ No ¨
3. Are you subject to any final order1 of any governmental commission, authority, agency or officer2 related to any securities, insurance or banking matter? Yes ¨ (If yes, please continue to Question 3.a) No ¨ (If no, please continue to Question 4)
a) If your answer to Question 3 was “yes”:
i) Does the order currently bar you from: (i) associating with an entity regulated by such commission, authority, agency or officer; (ii) engag...
BAD ACTOR QUESTIONNAIRE. 1. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?
a) If your answer to Question 1 was “yes”, was the conviction related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the Securities and Exchange Commission (the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes o No o
2. Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?
a) If your answer to Question 2 was “yes”, does the court injunction or restraining order currently restrain or enjoin you from engaging or continuing to engage in any conduct or practice related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities? Yes o No o
3. Are you subject to any final order of any governmental commission, authority, agency or officer(2) related to any securities, insurance or banking matter?
a) If your answer to Question 3 was “yes”:
i) Does the order currently bar you from: (i) associating with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities? Yes o No o
ii) Was the order (i) entered within the past ten years and (ii) based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct? Yes o No o
4. Are you subject to any SEC disciplinary order?(3)
a) If your answer to Question 4 was “yes”, does the order currently: (i) suspend or revoke your registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) place limitations on your activities, functions or operations; or (iii) bar you from being associated with any particular entity or class of entities or from participating in the offering of any ▇▇▇▇▇ stock?
5. Are you subject to any SEC cease and desist order entered within the past five years?
a) If your answer to Question 5 was “yes”, does the order currently require you to cease and desist from committing or causing a violation or future violation of (i) any knowledge-based anti-fraud provision o...
BAD ACTOR QUESTIONNAIRE. 1. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?
2. Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?
3. Are you subject to any final order of any governmental commission, authority, agency or officer (2) related to any securities, insurance or banking matter?
i) Does the order currently bar you from: (i) associating with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities? Yes No
ii) Was the order (i) entered within the past ten years and (ii) based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct? Yes No
4. Are you subject to any SEC disciplinary order? (3)
5. Are you subject to any SEC cease and desist order entered within the past five years?
6. Have you been suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association?
BAD ACTOR QUESTIONNAIRE. During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter? Yes ☐ (If yes, please continue to Question 1.a) No ☐ (If no, please continue to Question 2)