News & Analysis as of

General Solicitation Dodd-Frank Wall Street Reform and Consumer Protection Act

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 -

SEC Finds Crowdfunding Website a General Solicitation and Violated Broker-Dealer Rules

In a settled enforcement action, the SEC alleged the defendant failed to implement procedures reasonably designed to prevent U.S. persons from accessing and investing in securities through its crowdfunding website. The...more

Private Equity Websites and General Solicitations: A Case of Overzealous Hypersensitivity?

by McCarter & English, LLP on

It’s a well-settled law of physics: for every action, there’s a reaction. In some cases, there’s overreaction – generally best avoided, but a phenomenon to which many private equity funds may have fallen victim. Here, we...more

Angels in Limbo: Congress and SEC Consider Regulatory Changes with Potential for Profound Effects on Start-Up Investments

by K&L Gates LLP on

Three events occurred during 2013 that have the potential to significantly affect angel investment around the country: (1) the Securities and Exchange Commission (“SEC”) lifted the prohibition on general solicitation for...more

General Solicitation and Bad Actor Guidance from the SEC

The Securities and Exchange Commission (the “SEC”) has released a series of Compliance and Disclosure Interpretations (the “Interpretations”) recently addressing the general solicitation exemption under new Rule 506(c) of...more

SEC Issues Proposed Rules on Crowdfunding Capital Markets

Yesterday, the SEC proposed rules to permit companies to offer and sell securities through crowdfunding, as required by the Jumpstart Our Business Startups Act of 2012. Crowdfunding, which has become popular in recent years...more

New Regulation D General Solicitation and “Bad Actor” Disqualification: Considerations for Private Funds

by Latham & Watkins LLP on

Offerings of private investment fund interests routinely rely on Rule 506 of the Regulation D “safe harbor” from registration under the Securities Act of 1933. Historically, such offerings have been strictly required to avoid...more

Investment Management Legal + Regulatory Update -- October 2013

by Morrison & Foerster LLP on

- Regulatory Updates: CFTC Adopts “Substituted Compliance” Approach for Registered Investment Companies that are Commodity Pools; SEC’s Final Rules on General Solicitation and Bad Actor Disqualification for Investment...more

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

by Dechert LLP on

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

Concurrent EB-5 Offerings In The United States And Abroad

by Carlton Fields on

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

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

by DLA Piper on

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

General Solicitation – Week One – Flying Cars And More

It began with announcements like this from AngelList. For just $99 plus $25 per investment, wefunder will let you create a create a “beautiful profile” and send updates to followers, and provide free investment contracts,...more

Fundraising By Private Companies: SEC Lifts Ban On General Solicitation

by Varnum LLP on

Effective September 23, 2013, the Securities and Exchange Commission ("SEC") lifted the ban on general solicitation and advertising in connection with certain fundraising activities. This rule change was required by the...more

Reminders for Issuers That Intend to Use General Solicitation

Privately held operating company issuers (as distinguished from private funds) should plan ahead if they intend to use general solicitation for Rule 506(c) offerings after September 23, 2013. Here are just a few...more

The Impact of the SEC’s Final Rules on General Solicitation and Bad Actor Disqualification for Broker-Dealers and Investment...

The SEC recently finalized amendments to Rule 506 of Regulation D and Rule 144A under the Securities Act relaxing prohibitions against general solicitation in certain private offerings of securities implementing Section...more

In Case You Missed It - Interesting Items for Corporate Counsel (Update) - September 11, 2013

by Stoel Rives LLP on

As we run up the September 23 effective date of rules eliminating the prohibition on general solicitations under Regulation D and wait for final SEC "process" rules, a few additional resources are below(summary of comments on...more

Amended Rule 506 - Lifting the Ban on General Solicitation

by BakerHostetler on

At its July open meeting, the Securities Exchange Commission (SEC) approved a rule proposal to amend Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933 (the Securities Act)....more

Immediate Action Item for Private Funds and Their Managers: Prepare and Distribute "Bad Actor" Questionnaires

by Holland & Knight LLP on

As widely reported, the Securities and Exchange Commission (SEC) approved a final rule effective Sept. 23, 2013, that prohibits a fund relying on the vital Regulation D/Rule 506 exemption from SEC registration if the issuer...more

Update! New JOBS Act Regulations

Several of our discussions have mentioned the SEC’s delay in adopting final implementing regulations under the JOBS Act of 2012, however, on September 23, 2013 a few new JOBS Act regulations will become effective to implement...more

Open For Business: Comments On The SEC’s Latest Regulation D Proposals

A review of some of the approximately 300 comment letters the SEC has received relating to its latest round of Regulation D proposals is a showcase for the various types of companies that have already sprung up in the hopes...more

New Rule 506(d) "Bad Actor" Disqualification - A Continuous Diligence Headache for Emerging Companies

by McCarter & English, LLP on

As required by the Dodd-Frank Act, the SEC on July 10, 2013, adopted final Rule 506(d) to "disqualify felons and other bad actors" from Regulation D private offerings. New Rule 506(d) identifies persons and triggering events...more

SEC Lifts Ban on General Solicitation for Certain Private Offerings

by Partridge Snow & Hahn LLP on

Background - On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the “JOBS Act”) into law. The JOBS Act is intended to “increase American job creation and economic growth by improving...more

All The World’s A Stage, But The SEC Isn’t Allowing All Actors To Play Upon It

by Allen Matkins on

Every Rule Must Play It’s Part, But This Part Is A Sad One - There is much to dislike in the SEC’s recent “bad actor” rule amendments. While Congress conceived the idea of disqualifying bad actors (Section 926 of the...more

In Case You Missed It - Interesting Items for Corporate Counsel (Cumulative)

by Stoel Rives LLP on

As forecast, there is no shortage of law firm memos describing Regulation D changes, including the final rules eliminating the general solicitation ban (here) and prohibiting "bad actor" participation (here) and the proposed...more

Corporate and Securities Alert: SEC Clears Way for General Solicitation in Private Securities Offerings

by Fenwick & West LLP on

New regulations approved by the Securities and Exchange Commission (SEC) in July 2013 give companies greater freedom to communicate with potential investors in certain private securities offerings, creating both new...more

Shout It From the Rooftops! SEC Removes Ban on General Solicitation and Advertising for Certain Private Placements

On July 10, 2013, the Securities and Exchange Commission (SEC) eliminated the restriction on general solicitation and general advertising in certain private placements, providing increased flexibility for marketing and other...more

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