SEC Regulation A provides a registration exemption for smaller public offerings but includes a "bad actor" disqualification. If certain key parties, such as the issuer, underwriter, or affiliates, have been involved in securities violations, the exemption is forfeited.
* B is correctbecause underwriters are considered essential participants, and their status as bad actors disqualifies the offering.
* A,C, andDare incorrect because custodians, transfer agents, and clearing corporations are not included in the "bad actor" provisions of Regulation A.