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Is Any News Article a General Solicitation?

Posted in SEC News

Many assume that if a news article discussing an issuer is published at or around the time of an offering that would necessarily constitute a general solicitation.  Over time, however, the Staff of the Securities and Exchange Commission has provided guidance on this matter–both in the context of (traditional) private offerings and also of public offerings.  Generally, one should consider whether the issuer or anyone acting on the issuer’s behalf has participated in the preparation of the article or has reviewed or approved the article.  This analysis should consider whether employees or affiliates of the issuer participated in the article.  The Staff also has considered whether an issuer provided information for inclusion in the article or paid for preparation of the article.  Of course, if it has done so, the article will be viewed as a general solicitation.  It is important to consider whether the article is being used by the issuer or its financial intermediary to offer or sell securities in a current or a prospective offering.  This last prong may be difficult to evaluate if an issuer is regularly engaged in financings.