Series 82 common mistakes
Series 82 · Understand the traps and how to avoid them.
Treats a mass email, seminar invitation, or website post about a private placement as acceptable because the securities are 'private,' without first determining whether the offering is being conducted under Rule 506(b) or 506(c).
Candidates conflate 'private security' with 'no advertising restrictions' and skip the general-solicitation analysis that governs 506(b) offerings.
What to do instead
Classify the offering before any communication: for 506(b), confirm each prospect has a pre-existing substantive relationship and no general solicitation is used; for 506(c), confirm the issuer has taken reasonable steps to verify accredited status. Document the basis.
Repeats projected returns, 'guaranteed' distributions, or tax benefits from an issuer's marketing deck without confirming those statements appear in the offering memorandum and without presenting the risk factors.
Sales pressure and reliance on issuer-provided marketing materials lead candidates to treat promotional language as approved disclosure.
What to do instead
Use only language supported by the offering documents; pair any return discussion with the specific risk factors and liquidity limitations; retain the source document relied on.
Accepts an investor's signed accredited-investor questionnaire as complete verification on a Rule 506(c) offering and closes the subscription.
Candidates treat accreditation as a client representation rather than an issuer obligation to take reasonable steps to verify status in 506(c) deals.
What to do instead
For 506(c), obtain third-party verification such as tax documents, bank/brokerage statements, a CPA or attorney attestation, or a broker-dealer verification letter; document the method used.
Opens an account for an entity investor without identifying beneficial owners and authorized signers, or without confirming whether the entity itself qualifies as an accredited investor.
Entity accounts look administrative, so candidates focus on the individual representative and overlook beneficial ownership and entity-level eligibility.
What to do instead
Obtain formation documents, beneficial ownership certification, authorized signer list, and entity accreditation evidence; verify that the signer is authorized for the investment amount and entity type.
Treats accredited investor status as proof of suitability and skips the reasonable-basis and customer-specific suitability analysis for a private placement.
Candidates use the accreditation threshold as a compliance shortcut and assume wealthy investors can absorb any illiquid or high-risk product.
What to do instead
Separate eligibility from suitability: accreditation answers 'may they invest'; suitability requires analyzing financial profile, investment objectives, risk tolerance, liquidity needs, and concentration, then documenting the recommendation.
Describes a private placement position as liquid or readily sellable and fails to explain the restricted legend, holding periods, and absence of a public market.
Candidates focus on getting the subscription funded and do not review transfer restrictions or exit mechanics in the offering documents.
What to do instead
Review the offering memorandum and subscription agreement for transfer restrictions and Rule 144 holding periods; document the liquidity discussion with the customer before acceptance.
Does not document due diligence on the issuer or offering, such as use of proceeds, conflicts of interest, financial statements, management background, or unusual offering terms.
Candidates rely on the issuer's representations or a senior representative's verbal assurance instead of maintaining an independent review record.
What to do instead
Use a due diligence checklist covering issuer financials, management, use of proceeds, conflicts, litigation, and offering terms; note red flags and how each was resolved, and retain the record.
Submits a subscription packet with missing or inconsistent items: unsigned signature page, wrong entity name, investment amount that does not match the wire, missing spousal consent, or incomplete investor questionnaire.
Closing deadlines and lengthy subscription documents encourage candidates to forward packets without cross-checking every field.
What to do instead
Use a pre-closing checklist and reconcile the subscription amount, entity name, signer authority, questionnaire, and wire instructions against the offering documents before sending to the issuer.
Acts on emailed wire instructions or a last-minute change of bank details without independent callback verification.
Closing urgency and email-based workflows make candidates treat an emailed instruction as authenticated.
What to do instead
Verify wire changes by calling a known, pre-existing phone number; use dual control or a second verifier; never rely solely on email for fund movement.
Misunderstands closing mechanics: sends investor funds directly to the issuer before the subscription is accepted, assumes allocation without written confirmation, or fails to recognize when escrow is required.
Private placement closings differ from retail securities transactions, and candidates apply retail trade assumptions to subscription processing.
What to do instead
Know the acceptance conditions in the subscription agreement; use escrow when the offering requires it; obtain written confirmation of acceptance and allocation before treating the transaction as complete.