Law Blog Tag: Reg D

SEC Issues Guidance On General Solicitation And Advertising In Regulation D Offerings

SEC Issues Guidance Regarding The Exemption From Broker-Dealer Registration In Title II Of The JOBS Act

NASDAQ To Acquire Sharepost And Create The NASDAQ Private Exchange

Basic Refresher On The Private Placement Exemption

Section 4(2) of the Securities Act of 1933, as Amended (“Securities Act”) provides the statutory basis for private placement offerings. In particular, Section 4(2) exempts “transactions by an issuer not involving any public offering.” The key components of this statutory exemption are that the offering must be by the Issuer, not an affiliate, agent or third party, and that the transactions must not involve a public offering. In order to determine if there is a public offering, practitioners must consider Section 2(11) of the Securities Act which defines an underwriter. The Securities and Exchange Commission (“SEC”) and courts limit the scope of Section 4(2) by preventing indirect public offerings by issuers and control persons through third parties. Accordingly, if an investor acts as a link in the chain of transactions resulting in securities being distributed to the public, they are an underwriter, and the exemption under Section 4(2) is not available.

Section 4(6) Registration Exemption for Accredited Investors

January 28, 2010 in Securities Attorneys

Section 4(6) provides a registration exemption for offerings to accredited
investors, if the aggregate offering amounts up to the dollar limit of
Section 3(b) (currently $5,000,000), if there is no advertising or public
solicitation in connection with the transaction by the Issuer or anyone
acting on the Issuer’s behalf.