Bad Actors, when discussing venture-backed companies, are persons who have been convicted of certain crimes, are subject to certain SEC orders, or fit into other similar categories promulgated by the SEC. Companies cannot have Bad Actors as their directors, executive officers, promoters or owners if the company intends to rely on Rule 506 of Regulation D as an exemption from public filings when issuing securities or to raise funds using Regulation CF or Regulation A.