General Solicitation Accredited Investors

General Solicitation typically refers to the soliciting of investors to purchase securities. Prior to the passage of the JOBS Act in 2012, general solicitation was banned in connection with privately offered... more +
General Solicitation typically refers to the soliciting of investors to purchase securities. Prior to the passage of the JOBS Act in 2012, general solicitation was banned in connection with privately offered unregistered securities. Issuers were only permitted to offer such securities to investors with whom they had a pre-existing substantive relationship. Section 201(a) of the JOBS Act lifted the ban on general solicitation, but only with respect to accredited investors.  less -
News & Analysis as of

Is Your Purchaser Accredited? Clarifications from the SEC

Under Rule 506(c), companies can now engage in a general solicitation in conducting private placements but if they do so, they must verify that each purchaser is accredited. The SEC has provided some safe harbors for...more

SEC Issues Interpretive Advice About Verification Safe Harbors Under Rule 506(c)

The availability of the private placement exemption under SEC Rule 506 depends in large measure upon determinations that purchasers are “accredited investors” under the rules. Where there is no general solicitation, Rule...more

Guidance Provides Path Forward for Accredited Investor Verification

As mandated by Congress in Section 201(a) of the Jumpstart Our Business Startups Act, in July 2013 the Securities and Exchange Commission (SEC) amended Rule 506 under Regulation D of the Securities Act of 1933, creating a new...more

Corporate and Financial Weekly Digest - Volume IX, Issue 27

In this issue: - SEC Publishes Guidance for Investment Advisers and Proxy Advisory Firms Regarding Proxy Voting and Solicitation - SEC Division of Corporation Finance Issues C&DIs Relating to Accredited Investor...more

SEC Staff Provides Rule 506(c) Verification Guidance

The SEC Staff recently provided further guidance on the provisions of Rule 506(c) of Regulation D which permit the use of general solicitation and general advertising when sales are made only to accredited investors and the...more

Verifying Accredited Investors in Public Rule 506 Offerings: SIFMA Guidance

On June 23, 2014, the Securities Industry and Financial Markets Association (SIFMA) published a memo outlining several specific methods for verifying accredited investor status that SIFMA believes would satisfy the...more

In Case You Missed It - Interesting Items for Corporate Counsel

The Director of the SEC’s Division of Corporation Finance, Keith Higgins, recently gave the keynote address, here, at the 2014 Angel Capital Association Summit. He focused on the following three items on the SEC rulemaking...more

Latest C&DIs Regarding Rule 506

The Securities and Exchange Commission’s Division of Corporation Finance posted a few additional interpretations (at 260.33 and 260.34) late January relating to the continuation of offerings commenced prior to September 23,...more

SEC Staff Provides Clarification of Scope of Bad Actor Disqualification

The staff of the Securities and Exchange Commission’s Division of Corporation Finance published “Compliance and Disclosure Interpretations” (CDIs) on Wednesday, December 4, 2013, that provide important clarification regarding...more

Questions About Third-Party Confirmations Of Accredited Investor Status

Countless memoranda and alerts have been issued about the SEC’s adoption of rule amendments eliminating the prohibition against general solicitation and general advertising in Rule 506 and Rule 144A offerings. Congress...more

SEC Issues Proposed Rules Intended to Protect Investors and Gather Additional Information in Connection With Permitting General...

On July 10, 2013, the Securities and Exchange Commission ("SEC") issued proposed rules regarding amendments to Regulation D, Form D and Rule 156 of the Securities Act. The SEC has requested comments on the proposed rules....more

Reasonable Steps to Verify - Third Party Certification Procedure Designed to Comply with New SEC Rules Permitting General...

On July 10, 2013, the Securities and Exchange Commission (“SEC”) adopted rules to eliminate the prohibition against general solicitation and general advertising in certain securities offerings under Rule 506 of Regulation D...more

SEC’s Bad Actor Rules Roil Opinion Practice

The SEC’s bad actor rules are causing a great deal of consternation amongst lawyers who are being asked to give opinions that the offer and sale of securities do not require registration under the Securities Act of 1933. ...more

Financial Services Quarterly Report - Third Quarter 2013: U.S. Private Offerings: SEC Approves JOBS Act Requirement to Permit...

The SEC has amended1 Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933 (“Securities Act”) to (1) permit, in certain circumstances, an issuer to engage in general solicitation and general advertising in...more

Amending Rule 506 — Lifting the Ban on the General Solicitation of Investors and the New Bad Act Disqualification

The Securities and Exchange Commission (“SEC”) recently enacted amendments to Rule 506 (“the Rule”) promulgated under the Securities Act of 1933, as amended, (“the Securities Act”). These amendments were required by the...more

Private Offerings: Questions that Might Frequently be Asked Sometime Soon (Part II)

Shortly after the Securities and Exchange Commission (SEC) adopted the final rule relaxing the prohibition against general solicitation in connection with offerings made pursuant to new Rule 506(c) and Rule 144A, we provided...more

A Seismic Shift In The Securities Laws: The Elimination of the Ban on the Use of General Solicitation or General Advertising in...

In accordance with its mandate in Section 201(a) of the Jumpstart Our Business Startups Act ("JOBS Act"), on July 10, 2013, the Securities and Exchange Commission (“SEC”) adopted new Rule 506(c)[i], which is an amendment to...more

Concurrent EB-5 Offerings In The United States And Abroad

Until recently, U.S. offerors and others had to make offerings of EB-5 project investments solely offshore in order to benefit from Regulation S, an exclusion from registration requirements. The offerors had to exclude...more

A General (Solicitation) Lay of the Land

Last Monday, the 80-year ban on the use of general solicitation in certain exempt securities offerings was relaxed. General solicitation can now be used in private offerings conducted under Rule 506(c) of Regulation D and...more

The Financial Report - Volume 2, No. 17 • September 2013

Discussion and Analysis - Even some financial services industry professionals are confused. The 80-year-old prohibition on general solicitation ended on Monday of last week. This means it is now legal for companies to...more

Public advertising in ‘private’ Regulation D offerings

The Securities and Exchange Commission on July 10 promulgated rules implementing the 2012 JOBS Act provision permitting public advertising in “private” securities offerings sold to “accredited” investors. The action,...more

How To Use Electronic Media To Access Accredited Investors Under The New SEC Rules

Effective September 23, 2013, pursuant to new SEC Rule 506(c), issuers of securities are allowed to reach “accredited investors” through general solicitation as long as they take adequate precautions to a) limit the offering...more

New SEC rules on solicitation

On July 10, the SEC adopted rules eliminating the prohibition against general solicitation in securities offerings under Rule 506 of Regulation D under the Securities Act of 1933. These rules, effective Sept. 23, permit...more

SEC Chair Clarifies Effect of Proposed Rules on Newly Created Rule 506(c)

On July 10, 2013, the SEC approved final rules that repealed the ban on general solicitation in Rule 506(c) offerings if sales are made only to accredited investors and other conditions are met. On the same day, the SEC...more

Dawn of a Brave New World! Advertising in "private offerings" under new SEC Rule 506(c), but no "bad actors"

Exempt securities offerings are nearing the dawn of what promises to be a truly Brave New World: Beginning September 23, 2013, new SEC Rule 506(c) will allow advertising and general solicitation in certain “private”...more

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