Rule 506 Offerings

News & Analysis as of

The SEC’s Common Sense Approach to Private Placements and General Solicitation

Earlier this month the SEC issued concurrently (i) the Citizen VC No Action Letter (in response to a request for guidance authored by Mintz Levin) relating to the use of 506(b) for a private placement online and (ii) a series...more

"Corporate Finance Alert: SEC Staff Issues Interpretations on General Solicitation Prohibition"

The staff of the SEC Division of Corporation Finance (Staff) recently issued new Compliance and Disclosure Interpretations (CDIs) and an interpretive letter regarding the general solicitation prohibition in securities...more

Citizen.VC No Action Letter: Clarity and Guidance for Conducting a Private Placement Online

The SEC has recently provided clarity as to how an issuer of securities can conduct a private placement in a password protected web page under Rule 506(b), without it being deemed a “general solicitation” and thereby being...more

SEC Explains How to Form a Pre-Existing Relationship Using the Internet; New CDI’s Issued

The SEC granted no-action relief to Citizen VC, Inc. which appears to state, although subject to facts and circumstances, a pre-existing relation can be formed with a person that first contacts a seller of securities over the...more

SEC Regulations on Investment Securities Crowdfunding

Crowdfunding has created a revolution in the raising of funds for startup companies and for other projects, including both for-profit and not-for-profit projects. Crowdfunding is a process by which a company or project can...more

It’s Not Crowdfunding!

Since the Regulation A+ effective date last month, a number of websites have emerged that promote “Regulation A+ crowdfunding” contributing even further to the confusion in the market regarding...more

“Notable By Their Absence: Finders And Other Financial Intermediaries In Small Business Capital Formation”

Small businesses are often regarded as the catalyst for economic growth in the United States. Small businesses account for the creation of two-thirds of all new jobs, and are the incubators of innovation. The majority of...more

SEC Radically Revamps Regulation A - Part 2

Contents of Offering Statement - For many years, SEC Regulation A languished as an exemption from registration that nobody really used. Although securities issued in a Regulation A offering are not “restricted...more

CFTC Reauthorization Bill Includes JOBS Act Fix

The House Agricultural Committee passed the CFTC authorization bill late last week, HR 2289. HR 2289 incorporates in Section 312 a provision that was part of a bill introduced by Congressman Fincher to harmonize the...more

SEC Clarifies “Voting Equity Securities” for Purposes of the Bad Actor Rules

The Securities and Exchange Commission (the “SEC”) recently released additional guidance on the definition of “voting equity securities” as applied to the bad actor disqualification rules under Rule 506(d) of the Securities...more

Small Business Securities Bulletin: Making the Grade - SEC Finalizes Revision to Regulation A Offering, Including New Tier 2...

As we have noted in prior Bulletins, pursuant to Section 5 of the Securities Act of 1933 (Securities Act) and state securities laws, any offer and sale of a security must be registered with the Securities and Exchange...more

"Corporate Finance Alert: SEC Adopts Regulation A+ to Provide New Exemption for Smaller Capital-Raising Transactions"

On March 25, 2015, the U.S. Securities and Exchange Commission (SEC) adopted the final rules for the new Regulation A+ exemption, which will permit eligible issuers to conduct securities offerings of up to $50 million without...more

SEC Adopts Final Rules Expanding Regulation A, Providing a New Option for Offerings Under $50 Million

On March 25, 2015, the SEC formally adopted its final rule amendments governing the expansion of registration exemptions for public offerings of $50 million or less in any 12-month period under Regulation A of the Securities...more

SEC Advised to “Do No Harm” to Accredited Investor Definition

At its meeting on March 4, the SEC’s Advisory Committee on Small and Emerging Companies approved its rather limited recommendations to update the definition of “accredited investor” as it applies to natural persons as found...more

SEC Grants Second Bad Actor Waiver With Conditions

SEC Commissioner Kara Stein recently described what many saw as a possible model for harsher bad actor waivers after settling a matter with the SEC. According to Ms. Stein “The waiver was for a limited time, and only if...more

This May Not Be Rocket Science, But Is NASAA’s Form D Filing Fee Legal?

Earlier this week, the North American Securities Administrators Association (aka NASAA) announced the launch of its Electronic Filing Depository (EFD). The EFD allows issuers to file Form Ds in Rule 506 offerings online. A...more

NASAA Unveils Online Filing System for State Form D Filings

On December 15, 2014, the North American Securities Administrators Association, Inc. (NASAA) unveiled its Electronic Filing Depository (EFD) for use in connection with state Form D filings in Rule 506 offerings. The NASAA...more

Rule 506 Bad Actor Waivers – The New Normal?

SEC Commissioner Kara M. Stein gave a speech where she described a recently granted Rule 506 bad actor waiver. According to Ms. Stein, “The waiver was for a limited time, and only if certain conditions were met, creating...more

A Closer Look at Regulation D: OfferBoard Finds Rule 506(c) Offerings Have Lowest Percentage of Funds Committed at Time of Filing;...

In “Equity Crowdfunding Under Title II of the JOBS Act: The First Year,” OfferBoard reveals many interesting findings regarding offerings under Regulation D. The white paper finds that offerings under Rule 506(c) of Reg. D...more

Notification Requirement for Firms Claiming Compliance with the Global Investment Performance Standards (GIPS)

The GIPS Executive Committee has approved a new requirement, effective January 1, 2015, that any firm claiming compliance with GIPS must annually notify the CFA Institute of such claim by June 30. Each GIPS-compliant firm...more

Practical Implications of the JOBS Act Changes to Private Placements: Rule 506(c), Crowdfunding, and Reg A+

Two key features of the JOBS Act – general solicitation in Rule 506 offerings, and the increased thresholds at which an issuer will be required to register a class of securities under the Securities Exchange Act of 1934 (the...more

New Data on Rule 506 Offerings

Crowdnetic, a provider of technology and market data solutions to the global crowdfinance marketplace, has shared with us for publication data collected through their network of intermediaries....more

Securities and Governance Update

Each year, thousands of businesses and investment funds raise billions of dollars in capital through unregistered offerings under Rule 506—the most widely used exemption under Regulation D under the Securities Act of 1933, as...more

Weeding Out Bad Actors: The Rule 506 Bad Actor Provisions and Capital Markets Practice – One Year Later

As we approach the anniversary of the effectiveness of the Rule 506 bad actor provisions (if you don’t happen to have it marked on your calendar, the new rules went into effect on September 23, 2013), it is a good time to...more

CFTC Grants Exemptive Relief to Private Fund Managers: General Solicitation Conditionally Permitted

The JOBS Act and the regulations thereunder (which went effective on September 23, 2013) applies to private issuers – including hedge funds and private equity funds – that want to make general solicitations within the context...more

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