C.F.R. » Title 17 » CHAPTER II—SECURITIES AND EXCHANGE COMMISSION › PART 230—GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

17 C.F.R. § 230.508

Insignificant deviations from a term, condition or requirement of Regulation D

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(a) A failure to comply with a term, condition or requirement of § 230.504 or § 230.506 will not result in the loss of the exemption from the requirements of section 5 of the Act for any offer or sale to a particular individual or entity, if the person relying on the exemption shows:

(1) The failure to comply did not pertain to a term, condition or requirement directly intended to protect that particular individual or entity; and

(2) The failure to comply was insignificant with respect to the offering as a whole, provided that any failure to comply with paragraph (c) of § 230.502, paragraph (b)(2) of § 230.504 and paragraph (b)(2)(i) of § 230.506 shall be deemed to be significant to the offering as a whole; and

(3) A good faith and reasonable attempt was made to comply with all applicable terms, conditions and requirements of § 230.504 or § 230.506.

(b) A transaction made in reliance on § 230.504 or § 230.506 shall comply with all applicable terms, conditions and requirements of Regulation D. Where an exemption is established only through reliance upon paragraph (a) of this section, the failure to comply shall nonetheless be actionable by the Commission under section 20 of the Act.

[54 FR 11374, Mar. 20, 1989, as amended at 57 FR 36473, Aug. 13, 1992; 81 FR 83553, Nov. 21, 2016]
Notes of Decisions
Cited in 9 cases (2 in the last 5 years), 1992–2024 · leading case: Securities and Exchange Commission v. George G. Levin
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Securities and Exchange Commission v. George G. Levin (2017) ca11 · cites it 4× “17 C.F.R. § 230.508 (a). The first two factors tie the deviation to the purchasers: the failure to comply with a term, condition or requirement of Rule 506 must not (1) “pertain to a term, condition or requirement directly intended to protect that particular individual or…”
Clinton D. Brown v. Earthboard Sports Usa, Inc. Hugh Jeffreys Jeffrey A. Vaughn Lincoln Financial Advisors Corporation, (2007) ca6 “17 C.F.R. § 230.508 (a). Based on this, Vaughn seems to argue that Earthboard’s noncompliance was subject to the safe harbor provided by Rule 508; that he is not liable under state law because he is not an underwriter, issuer, or dealer subject to federal registration…”
Wright v. National Warranty Company (1992) ca6 “Wright was harmless error within the meaning of 17 C.F.R. 230.508(a). B. 32 Plaintiffs also contend that the district court erred in concluding as a matter of law that Robert E.”
Pinnacle Communications International, Inc. v. American Family Mortgage Corp. (2006) mnd “17 C.F.R. § 230.508 . Pinnacle argues that it prepared a thorough private placement memorandum, limited stock issuance to investors who affirmed in writing that they met accreditation requirements, raised less than $5 million, and did no general solicitation.”
Chanana's Corp. v. Gilmore (2003) wawd “17 C.F.R. § 230.508 ; see also Hicks § 7:233.”
Securities and Exchange Commission v. Armijo (2023) casd · cites it 2× “18 19 17 C.F.R. § 230.508 (a). Rule 508(a), however, is facially unavailable to Defendants here.”
PINNACLE COMMUNICATIONS INTERN. v. American Fam. Mortg. (2006) mnd “17 C.F.R. § 230.508 . Pinnacle argues that it prepared a thorough private placement memorandum, limited stock issuance to investors who affirmed in writing that they met accreditation requirements, raised less than $5 million, and did no general solicitation.”
Jimmy Esebag v. Justin Whaley (2024) ca9 “See 17 C.F.R. § 230.508 (a)(3). But Esebag or ULG needed to make a “good faith and reasonable attempt .”
Brown v. Earthboard Sports (2007) ca6 “17 C.F.R. § 230.508 (a). Based on this, Vaughn seems to argue that Earthboard’s noncompliance was subject to the safe harbor provided by Rule 508; that he is not liable under state law because he is not an underwriter, issuer, or dealer subject to federal registration…”
— 17 C.F.R. § 230.508(a) — 1 case
Wright v. National Warranty Company (1992) ca6 “Wright was harmless error within the meaning of 17 C.F.R. 230.508(a). B. 32 Plaintiffs also contend that the district court erred in concluding as a matter of law that Robert E.”
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