SEC Is Monitoring General Solicitations

In another of what seems to be a blizzard of speeches by SEC officials, SEC Chair Mary Jo White commented on steps the SEC is taking to monitor general solicitations for securities offerings.  Ms. White noted “Contemporaneously with lifting the ban on general solicitation, the SEC staff has undertaken an interdivisional effort designed to monitor how the ability to advertise and “generally solicit” is actually occurring – how companies and hedge funds are taking advantage of the new rule. It includes assessing the impact of general solicitation on the market for private securities and –importantly –on identifying fraud if it is occurring. If it is, we can seek to stop those in their tracks, who would inappropriately take advantage of this new more open environment.”

As to the controversial proposed rules on general solicitation, Ms. White indicated action may be forthcoming soon. “This is an important proposal, and there are a lot of different views about it, so it is important to have an opportunity to consider these views . . . But, for investors’ sake and the sake of the new marketplace, we need to move expeditiously toward adoption, following appropriate consideration of the comments.”

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.

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