REGULATION D - RULE 508

a) A failure to comply with a term, condition or requirement of Rule 504, 505 or 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 Rule 502, paragraph (b)(2) of Rule 504, paragraphs (b)(2)(i) and (ii) of Rule 505 and paragraph (b)(2)(i) of Rule 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 Rule 504, 505 or 506.

(b) A transaction made in reliance on Rule 504, 505 or 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.

Source: Securities and Exchange Commission (2016), Securities Act of 1933