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Tag Archives: private placements

Reg D and Private Placements Boot Camp

Posted in Events, Private Placements, Rule 506 Rulemaking

On March 13-15, 2014, Morrison & Foerster partner Marty Dunn will participate on the faculty of an ALI CLE course called “Regulation D Offerings and Private Placements.” The course will focus on private placements and the new regulatory environment as a result of the JOBS Act. The course will be held in Paradise Valley, AZ,… Continue Reading

Private Placements and Other Financing Alternatives 2014

Posted in Events, Private Placements

On March 25-26, 2014, Morrison & Foerster partner Anna Pinedo will chair a PLI conference entitled Private Placements and Other Financing Alternatives 2014. This is the first in-person PLI conference that will discuss the proposed crowdfunding rules, the proposed Reg A+ rules, and the practical issues emerging in connection with Rule 506 offerings using general… Continue Reading

SEC Issues Investor Bulletins Relating to General Solicitation and Accredited Investors

Posted in Rule 506 Rulemaking, SEC News

In September 2013, the SEC’s Office of Investor Education and Advocacy issued an alert for investors relating to the SEC’s new general solicitation rules.  In addition, a second bulletin provides details on the definition of “accredited investor.”  These documents are available on the SEC’s website at the following links: http://www.sec.gov/investor/alerts/ia_solicitation.pdf http://www.sec.gov/investor/alerts/ib_accreditedinvestors.pdf The general solicitation alert… Continue Reading

General Solicitation Solution

Posted in Private Placements, Rule 506 Rulemaking

Today is a big day for issuers seeking to raise capital in private placements.  For 80 years, issuers have been constrained in their private capital raising efforts: allowed only to reach out to those potential investors with whom the issuer or the broker dealer engaged to assist with the offering have a pre-existing relationship.  Today,… Continue Reading

FINRA Investor Alert Highlights Private Placement Risks

Posted in Private Placements

FINRA posted today an investor alert that highlights risks relating to private placements.  The alert summarizes the differences between private placements and registered offerings, and underscores FINRA’s concerns about fraud and sales abuse, long holding periods and lack of issuer information.  This alert was issued six days prior to the effectiveness of amendments lifting the… Continue Reading

Reminders for Broker-Dealers Regarding Rule 506 Offerings

Posted in Rule 506 Rulemaking

In an earlier post, we commented on some considerations for issuers and their advisers in respect of offerings made in reliance on Rule 506 after September 23, 2013.  Broker-dealers that are serving as financial intermediaries or placement agents in connection with private offerings also should plan ahead and take into account that, with the effective… Continue Reading

FINRA Updates Private Placement Form

Posted in Private Placements

In its continuing quest to improve member firm due diligence in private placements, thereby enhancing investor protections (See our posts on July 7, July 24 and August 6, 2013), on August 19, 2013, FINRA issued Regulatory Notice 13-26 about the updated Private Placement Form (a copy of which is attached to the Notice) that firms… Continue Reading

SEC Proposals Regarding Private Offerings

Posted in Rule 506 Rulemaking

The SEC’s proposed changes to private offerings, including proposed changes to Form D, Form D filing requirements, and temporary requirements to submit general solicitation materials, already are generating comment.  Reps. McHenry and Garrett have requested that, among other things, the SEC clarify that issuers will be able to rely on new Rule 506(c) following the… Continue Reading

FINRA Cracks Down on Private Placements

Posted in Private Placements, Rule 506 Rulemaking

Earlier this year, FINRA announced that the policing of private placements would be its regulatory priority for 2013.  However, FINRA enforcement actions relating to private placements have been dramatically increasing since 2010, as the chart below indicates. With the adoption of FINRA Rule 5123 (requiring broker-dealers to file with FINRA copies of offering documents used… Continue Reading

Private Offerings: Questions that Might Frequently be Asked….

Posted in Private Placements, Rule 506 Rulemaking

As clients begin to think about future private offerings once the SEC’s final rule becomes effective, a number of interesting questions are emerging concerning offerings that take place sequentially, or that may be integrated.  In this alert, we provide our initial reactions to some of these questions:  http://www.mofo.com/files/Uploads/Images/130723-Private-Offerings.pdf. We’ll be updating our Q&A as we… Continue Reading

FINRA Rule 5123 Amendment

Posted in Private Placements

On June 20, 2013, FINRA filed an immediately effective amendment to Rule 5123, Private Placements of Securities, to codify the requirement that members provide the required information by using the electronic Private Placement Form and filing it via FINRA Firm Gateway (see FINRA Regulatory Notice 12-40). FINRA also proposed, effective immediately, that the Form include additional due-diligence information, to… Continue Reading

Private Placements and Other Financing Alternatives

Posted in Events, Private Placements

On April 15, 2013, Anna Pinedo will be chairing a one-day Practising Law Institute conference (live in New York City, with various groupcast locations, as well as live webcast) titled Private Placements and Other Financing Alternatives 2013.  This year’s conference will feature a number of sessions addressing JOBS Act-related developments, including an update on the… Continue Reading

JOBS Act at Year 1

Posted in Crowdfunding, Decimalization, Emerging Growth Company Status, Exchange Act Registration Thresholds, IPO On-Ramp, Private Placements, Regulation A+, Research, Rule 506 Rulemaking

Any milestone, such as an anniversary, provides an opportunity for reflection and evaluation.  At the one-year anniversary of the JOBS Act, preliminary experience gives reason for some optimism.  The centerpiece of the JOBS Act, the “IPO on-ramp” provisions contained in Title I, have proven quite useful.  The SEC Staff’s guidance in the form of Frequently… Continue Reading

FINRA Updates Private Placement Filing Requirements FAQs

Posted in Private Placements

FINRA recently posted two updates to its Private Placement Filing Requirements FAQs. http://www.finra.org/Industry/Compliance/RegulatoryFilings/PrivatePlacements/FAQ/index.htm?utm_source=MM&utm_medium=email&utm_campaign=Weekly_Update_012313_FINAL#1-4. In the first update, FINRA clarified that the Rule 5123 filing obligation applies to private placements to any individual accredited investor, which includes officers, directors and general partners of the issuer (Rule 510(a)(4)) and entities in which all the equity owners are… Continue Reading

FINRA 5123 Becomes Effective; FINRA Releases FAQs

Posted in Private Placements

Earlier this week, FINRA Rule 5123 relating to private placements became effective, and FINRA released a set of FAQs (see http://www.finra.org/Industry/Compliance/RegulatoryFilings/PrivatePlacements/FAQ/index.htm) to provide market participants with additional guidance.  The FAQs clarify that only private placements that are made to institutional accredited investors are exempt from the filing requirements, while those made to accredited investors that… Continue Reading

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

FINRA Rule 5123 to Become Effective in December

Posted in Private Placements

We have previously written about FINRA Rule 5123 (see http://www.mofo.com/files/Uploads/Images/120615-FINRA-Rule-5123.pdf) which will apply to private placements in which a FINRA member firm participates.  On September 5th, FINRA announced that the rule will become effective on December 3, 2012 for offerings commencing after such date.  See the full notice at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p163707.pdf FINRA Rule 5123 applies to… Continue Reading

Threat Level Orange

Posted in Crowdfunding, Rule 506 Rulemaking

The state securities regulators, NASAA, just recently published their list of financial products that pose investor protection concerns.  Not surprisingly given the level of rhetoric from the states, crowdfunding and internet-based offers of securities are at the top of the list of “new threats” to investors.  The state securities regulators caution that once JOBS Act… Continue Reading

ABA Task Force Tries Again on “Finder” Issue

Posted in Broker-Dealer Registration

For several years, a task force within the Business Law Section of the American Bar Association has tried to get the attention of federal and state regulators to address an issue that comes up from time to time in private placements and even in an occasional public offering.  What do you do about a person… 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

A Capital Idea

Posted in Rule 506 Rulemaking

Many smaller banks in the United States recently received a bit of surprising news.  The banking agencies published their notices of proposed rulemaking relating to the bank capital requirements.  The Basel III NPR made clear that only the smallest banks in the United States would be exempt from compliance with the heightened regulatory capital requirements… Continue Reading

Integration Disintegration?

Posted in Rule 506 Rulemaking

One of the thorniest issues for securities lawyers always has been addressing potential integration questions.  We have been trained to recognize that there are heightened concerns associated with offerings occurring in close proximity to one another, or changes in offering format (from private to public or public to private offering).  Over time, the SEC has… Continue Reading

Trust, and Verify

Posted in Rule 506 Rulemaking

In considering the relaxation of the prohibition against general solicitation and general advertising that was incorporated into the JOBS Act, Congressional attention seemed to focus on some quid pro quo arrangement that demands verification of accredited investor status.  This leads us to wonder why it takes a “trade” of this sort to justify removing 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