SEC Adopts JOBS Act Private Placement Provisions: Lifts Ban on General Solicitation and Advertising in Private Placements

On July 10, 2013, the Securities and Exchange Commission (“SEC”) approved by a vote of 4-1 final rules that eliminate the prohibition against general solicitation and advertising in certain private offerings of securities. In addition, the SEC approved a final rule to disqualify issuers from relying on Rule 506 of the Securities Act of 1933 if certain felons and other “bad actors” are participating in such offering. Finally, the SEC proposed rules for comment in relation to their ability to evaluate the development of market practices in Rule 506 offerings.

Amendments to Rule 506 and Rule 144A to Lift General Solicitation and Advertising Ban -

Companies, private equity funds, venture capital funds or hedge funds seeking to raise capital through the sale of securities must either register the offering with the SEC, or rely on one of the many exemptions from registration. Under current Rule 506 of Regulation D, the most widely-used exemption, an issuer may sell an unlimited amount of securities to an unlimited number of “accredited investors” and up to 35 non-accredited investors. Under this exemption, however, the issuer cannot offer or sell such securities through any form of general solicitation or general advertising.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Patterson Belknap Webb & Tyler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.