Responsibility for Accuracy of Issuer Disclosures
Before agreeing to participate in a DPP offering, a broker-dealer or associated person must have reasonable grounds to believe that the issuer has adequately and accurately disclosed all material facts to prospective investors. This belief must be based on information the program’s sponsor has made available to the broker-dealer. At a minimum material facts provided must include:
• sponsor and underwriter compensation
• physical properties of the program
• tax aspects
• financial stability of the sponsor
• experience of the sponsor
• the program’s risk factors
• conflicts of interest involving the issuer, sponsor, or broker-dealer
• any appraisals and other reports that have been prepared
Perti