Rule 506 Offerings General Solicitation

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

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 Provides Guidance on Activities That Constitute "General Solicitation" for Private Placements on Electronic Platforms

The U.S. Securities and Exchange Commission (the “SEC”) on August 6, 2015, issued a no-action letter to Citizen VC, Inc. (the “Citizen Letter”) and new compliance and disclosure interpretations (“C&DIs”), providing...more

Regulation A+ Gives a Powerful Tool to Small Companies

The JOBS Act of 2012 was meant to loosen the regulations regarding private equity, opening up new classes of investors and freeing entities seeking new investment from solicitation rules put in place before color television...more

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

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

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

Industry still foggy about crowdfunding nearly one year after adopting Rule 506(c) and eliminating the ban on general solicitation

As we mark the one-year anniversary of the adoption of Rule 506(c) and the elimination of the ban on general solicitation and general advertising, I filter through the discussions taking place among crowdfunding...more


In the last few days, we received a few inquiries regarding our prior post on the CFTC’s temporary relief permitting funds to engage in general solicitation to the text that the funds were conducting Rule 506(c) offerings or...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

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

Corporate Communicator - Spring 2014

In this issue of the Corporate Communicator we bring you two short articles on important developments from the SEC relating to private securities offerings and private M&A transactions. In the first article, we discuss the...more

Keith Higgins Speaks To JOBS Act Misperceptions: • The Staff Will Not Be Quick To Second Guess • “Venture Fairs” And “Demo Days”...

In a recent speech, Keith Higgins, Director, SEC Division of Corporation Finance, gave his views on certain misperceptions and other matters regarding general solicitation under the JOBS Act....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 Staff Issues Interpretive Guidance on Recently Adopted Amendments to Rule 506 Addressing General Solicitation and Bad...

Effective September 2013, the U.S. Securities and Exchange Commission (SEC) amended Rule 506 of Regulation D to (1) permit, in certain circumstances, an issuer to engage in general solicitation and general advertising in...more

SEC Staff Announces 2014 Broker-Dealer Examination Priorities

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced the 2014 examination priorities (the “Announcement”) for its National Examination Program (the “NEP”). The priorities are organized according to...more

The Uncertain Status of Demo Days and Pitch Days Requires Special Care

We've all heard the statistics, that the private market for fundraising is larger than the public market, and that angel investors in the private market are responsible for nearly all seed and early-stage deals. In 2012, for...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

Bad Actor Guidance from the SEC Staff

Recently posted Compliance and Disclosure Interpretations follow. Question 260.14 - Question: When is an issuer required to determine whether bad actor disqualification under Rule 506(d) applies?...more

New Rule 506 C&DI’s Require Some Explaining

Nancy Wojtas, the head of the public companies group at Cooley LLP, alerted me to the fact that the SEC staff yesterday issued 14 new Compliance & Disclosure Interpretations (C&DIs) relating to Rule 506 under Regulation D. ...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

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