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Tag Archives: general solicitations

A Little History

Posted in Rule 506 Rulemaking

Many comment letters relating to the SEC’s proposed rules relaxing the ban on general solicitation suggest that the JOBS Act mandate was not well thought through and that relaxing the ban on general solicitation requires careful thought.  While it is true that any change that would affect investor protections should require careful thought, it seems… Continue Reading

SEC’s Investment Advisory Committee Recommends Filing of General Solicitation Material

Posted in Rule 506 Rulemaking

The SEC’s Investment Advisory Committee has recommended that the SEC should require issuers relying on the exemption from the ban on general solicitation and advertising to file a form as a precondition for claiming the exemption, and also file with the SEC general solicitation and general advertising material they use in private offerings that rely… Continue Reading

Eliminating the Prohibition on General Solicitation for Commodity Pools

Posted in Rule 506 Rulemaking

When the SEC finalizes proposed rules that eliminate the prohibition on general solicitation and general advertising, private funds will be free to jump in and publicly offer their securities, right? Not so fast, especially if the private fund is a commodity pool under the Commodity Exchange Act. Among other things, Section 201(a)(1) of the JOBS… Continue Reading

If a Tree Falls in the Forest….

Posted in Rule 506 Rulemaking

Over the last few weeks, many commentators have written about the potential for widespread fraud and abuse in connection with Rule 506 offerings in which general solicitation is used.  Some of these commentators have noted that if general solicitation is permitted, additional safeguards should be implemented in order to protect accredited investors.  The argument seems… Continue Reading

MoFo Seminar: JOBS Act Update

Posted in Events

Join us for a JOBS Act Update. The seminar will be held at The Michelangelo in New York on Friday, September 21st, from 8:15am-10:00am. Want to attend? Click here. We invite you to join us for the first of our fall CLE series (note: new location). Our session will focus on developments related to the… Continue Reading

SEC Proposed Rules Would Pave the Way for Private Fund Advertising

Posted in Rule 506 Rulemaking

Now that the SEC has proposed rules to eliminate the general solicitation and general advertising restrictions for certain offerings of securities, can advertisements for private funds on bus shelters and billboards be far behind? Not so fast. Private funds, including hedge funds, venture capital funds and private equity funds, often rely on Section 4(a)(2) and… Continue Reading

SEC Releases Proposed Rules Relaxing Ban on General Solicitation

Posted in Rule 506 Rulemaking

Following this morning’s meeting, the Commission has published its proposed rules: http://www.sec.gov/rules/proposed/2012/33-9354.pdf Summary The SEC published its guidance today as a proposed rule, with a comment period, and not as an interim final rule. The SEC proposes to amend Rule 506 to provide that the prohibition against general solicitation contained in Rule 502(c) shall not… Continue Reading

SEC Proposes Rules to Relax the Ban on General Solicitation: First Take

Posted in Rule 506 Rulemaking

At a meeting this morning, the SEC voted to propose rules relaxing the ban on general solicitation for certain offerings conducted pursuant to Rule 506 and resales under Rule 144A.  In a meeting that lasted approximately 45 minutes, the Staff outlined the principal aspects of the proposed rules.  The Staff indicated that it was proposing… Continue Reading

PIPE As Usual

Posted in Rule 506 Rulemaking

We’ve been thinking about whether the changes to Rule 506 offerings are likely to have any effect on the PIPE market.  Our preliminary conclusion is that the ability to use general solicitation is unlikely to have much effect on PIPE transactions.  An already public company generally turns to a PIPE transaction for financing because the… Continue Reading

The JOBS Act and Private Funds

Posted in Rule 506 Rulemaking

Section 201(a)(1) of the JOBS Act directs the SEC to repeal the ban on general solicitation and general advertising in securities offerings under Rule 506 of Regulation D and Rule 144A.  Can advertisements for hedge funds in Cigar Aficionado and The Wine Spectator be far behind? Not so fast.  The SEC has missed its July 4 deadline… Continue Reading