Private Placements

News & Analysis as of

New UK Withholding Tax Exemption Set to Boost the UK Private Placement Market

On 4 December, George Osborne in his Autumn Statement, announced a new UK withholding tax exemption for interest payments on UK private placements. The announcement was followed by draft legislative clauses with the Finance...more

Condo hotels: Don’t forget the secret sauce!

Condo hotels are back in vogue as “securities” - Developers particularly like the “new model” where condo hotel investments are offered as a “securities” using the new SEC Rule 506(c) for private placements with public...more

It’s Going to be Harder to Sell Unregistered Securities

The SEC has issued a Risk Alert and FAQs to remind broker-dealers of their obligations when they sell unregistered securities on behalf of clients. This occurs when founders and employees sell their initial stakes in...more

New ACE Portal/NYSE Platform Could Facilitate Private Equity Fund Raising

An enduring challenge of private equity is fund raising, whether in connection with fund formations, portfolio company financings or limited partner secondary sales. The recent modification of the SECs rules on general...more

SEC’s Office of Investor Education and Advocacy Releases Alert on Identifying Fraudulent Private Placements

On August 4, the Securities and Exchange Commission’s Office of Investor Education and Advocacy issued an Investor Alert to assist investors in identifying potentially fraudulent private placements. In the Alert, the Office...more

Private placements: tapping the US market

European corporates are turning to the US private placement market in growing numbers, as they seek to broaden and diversify their sources of funding while locking in some attractively priced long-term debt. When Smith...more

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 to Revise “Accredited Investor” Definition — for Better or Worse?

In connection with the duties imposed on it by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC is set to come out with further revisions to the definition of “accredited investor” in July 2014. Under...more

No Billboards, Please

Companies intending to seek funding under the JOBS Act’s crowdfunding provision gained a seeming advantage in September when the SEC removed its ban on the general solicitation or advertising of certain types of private...more

SEC Division of Corporation Finance Issues Guidance on Rule 506(c) Private Placements

On January 23, the Securities and Exchange Commission’s Division of Corporation Finance issued new Compliance and Disclosure Interpretations (C&DIs) with respect to Rule 506 exemptions from registration under the Securities...more

Corporate and Financial Weekly Digest - Volume IX, Issue 6

In this issue: - SEC Division of Corporation Finance Issues Guidance on Rule 506(c) Private Placements - SEC Issues No-action Relief Regarding Registration of M&A Brokers - CFTC Issues Guidance on New...more

SEC Sanctions Adviser for Failing to Inform ERISA Clients of Improper Investment Allocation

The Securities and Exchange Commission sanctioned an investment adviser for allowing some of its ERISA plan clients to invest in private placements, even though the issuer specifically restricted investments by ERISA plans. ...more

"The Future of Marketing Non-EU Alternative Investment Funds in Europe"

Adopted by the European Parliament in 2010 and implemented by EU member states in July 2013, the Alternative Investment Fund Managers Directive (the Directive) seeks to protect investors and mitigate market instability by...more

Suitability And The “Recidivist Broker”

On January 2, 2014, the Financial Industry Regulatory Authority (“FINRA”) published its annual regulatory and examination priorities letter for 2014. In the publication, FINRA addressed a number of matters, including...more

FINRA’s Annual Priorities Letter

FINRA has released its annual letter highlighting its areas of focus. Quite a number of the priorities reflect market changes, and reflect FINRA’s focus on developments post-JOBS Act. For example, the letter notes that...more

Bad Actors

On July 10, 2013, the Securities and Exchange Commission (“SEC”) adopted amendments to Rule 506 of Regulation D (“Reg D”) that, among other things, prohibit issuers of securities from relying on Reg D if “bad actors” are...more

New Compliance and Disclosure Interpretations

On December 4, the Division of Corporation Finance of the SEC issued new Compliance and Disclosure Interpretations regarding, among other things, Rules 506(d) and (e) of Regulation D under the Securities Act of 1933. These...more

The Value of Relationships

Maybe, given that we’re living in the age of social media with Facebook “friends” and LinkedIn contacts, it shouldn’t be all that surprising that the value of relationships may appear to have diminished. In fact, in many...more

The Alternative Investment Fund Managers Directive—a guide for US managers

The EU Alternative Investment Fund Managers Directive (AIFMD) has now been in force for several months. This overview note is aimed at US managers who have not yet had to get to grips with the AIFMD but will need to raise...more

NASAA’s Perceived Threats

In its annual list of risks posed to investors and small businesses, NASAA once again identifies private offerings. NASAA notes that “[f]raudulent private placement offerings continue to rank as the most common product or...more

Guide to Publicly Offered Private Placements Under New Rule 506(c)

Background: A company that needs capital to expand its business or fund its operations often chooses to sell stock or other securities to investors in order to meet its funding requirements. All offerings of stock or...more

General Solicitation Solution

Today is a big day for issuers seeking to raise capital in private placements. For 80 years, issuers have been constrained in their private capital raising efforts: allowed only to reach out to those potential investors with...more

Securities Law Compliance: An Overview of Small Offering Exemptions and Registration for Business Owners Interested in Raising...

Following is an overview of several elements to be considered by issuers undertaking a “small offering” or “private placement” of securities. For purposes of this discussion, a “security” includes stock in a corporation;...more

FINRA Warns Investors About Private Placements

On the eve of an anticipated increase in private-placement activity as a result of recent reforms made pursuant to the JOBS Act, FINRA issued an Investor Alert on Monday about risks associated with private placements. The...more

My Broker at E.F. Hutton Says..........? -- Using Private Placement Variable Deferred Annuities (PPVA) to Invest in Real Estate...

Overview - American taxpayers have approximately $4.7 trillion invested in IRAs as of 2011. Only 2 percent of these assets or $94 billion are invested in self-directed IRAs. This is a surprising result when you...more

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