Regulation D Rule 506 Private Offerings

In the most recent survey of state securities regulators, fraudulent private placement offerings were ranked as the most common product or scheme leading to investigations and enforcement actions.  These offerings also are commonly referred to as Regulation D Rule 506 offerings (the exemption in federal securities laws that allows private placements to be sold to investors without registration).  By definition these are limited investment offerings that are highly illiquid, generally lack transparency and have little regulatory oversight. 

While Regulation D Rule 506 offerings are used by many legitimate companies to raise capital, these investment offerings are high-risk and may not be suitable for many individual investors.  The 2012 JOBS Act significantly relaxed the restrictions on the manner in which Regulation D Rule 506 offerings can be marketed to the general public, eliminating the previous ban on general solicitations (advertising).  Once the rules implementing this change are finalized by the SEC, investors will begin to see a variety of advertisements related to private placement offerings, even though only a very small percentage of the population will be eligible to invest.

Department Contacts

Enforcement Contact (Kelly)

Kelly Mathias

Supervisor Investigations & Examinations
600 East Boulevard Avenue State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone:
(701) 328-2929
Toll Free:
(800) 297-5124
Fax:
(701) 328-0149
Enforcement Contact (Doug)

Doug Smith

Investigator
600 East Boulevard Avenue State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone:
(701) 328-2926
Toll Free:
(800) 297-5124
Fax:
(701) 328-0148
Enforcement Contact (Rachel)

Rachel Rice

Investigator
Grafton Satellite Office
701 W. 6th Street, #312
Grafton , ND 58237
Phone:
(701) 352-4592
Fax:
(701) 328-0126
Email:
Enforcement Contact (Michael)

Michael F. Daley

Attorney/Deputy Commissioner
600 East Boulevard Avenue State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone:
(701) 328-4701
Toll Free:
(800) 297-5124
Fax:
(701) 328-0127