Rule 506 Offerings Accredited Investors

News & Analysis as of

Using the Internet to Raise Money: Securities Laws and Crowdfunding

There are many services available to emerging companies to raise money through crowdfunding. As an entrepreneur or leader of a company evaluating these options, it is important to understand the basic legal foundations of...more

General Solicitation of Investors for Your Financing: Rule 506(c) of Regulation D

Previously, we discussed a startup’s most important tool for selling debt or equity securities in compliance with the Securities Act of 1933, as amended: Rule 506(b) of Regulation D. This rule is critically important to...more

Raising Capital? Don’t Forget about SEC Filings (It’s Not as Difficult as It Sounds)

The mention of "securities law and regulations" is a common, but daunting phrase that many entrepreneurs hear when they are attempting to raise money from investors for their companies. Under federal securities laws, any sale...more

Crowdfunding and Real Estate Development

The real estate development market continues to open up to crowdfunding, and the changes to capital raising for real estate projects could be significant if only a small portion of the potential of these new methods take...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

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 Staff Issues Guidance on Accredited Investor Tests and Verification of Accredited Investors for Rule 506(c) Offerings

The staff of the SEC’s Division of Corporation Finance added to its Compliance and Disclosure Interpretations posted on the SEC website new Questions 255.48-255.49 and 260.35-260.38 which address (1) elements of the...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

SEC Division of Corporation Finance Issues C&DIs Relating to Accredited Investor Verification Methods

On July 3, the Securities and Exchange Commission’s Division of Corporation Finance issued six new Compliance and Disclosure Interpretations (C&DIs) with respect to determination of accredited investor status and, in...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

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

Accredited Investor Verification under Rule 506(c)

Bill Carleton has a good post regarding the recent comments from Keith Higgins, the Director of the Division of Corporation Finance, who spoke at the 2014 Angel Capital Association Summit. Higgins discussed the SEC’s...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

SEC Provides Interpretations on Rule 506(c)

As we’ve previously blogged, in July 2013 the SEC adopted rules that permit general solicitation and general advertising in connection with certain offerings of securities to accredited investors. Yesterday, to help the...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

In Case You Missed It - Interesting Items for Corporate Counsel (Cumulative) - October 9, 2013

The SEC extended the comment period for Regulation D "process rules" to November 4, 2013, perhaps after recognizing that in many ways, the proposed rules make Regulation D worse for issuers. See here. In the meantime, the SEC...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

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