SEC Adopts Rules Eliminating the Prohibition Against General Solicitation in Certain Private Offerings and Disqualifying Bad Actors From Certain Offerings and Proposes New Reg D Requirements

Corporate / Financial Institutions Alert

July 17, 2013
Corporate / Financial Institutions Alert


The Jumpstart Our Business Startups Act (JOBS Act) directed the U.S. Securities and Exchange Commission (SEC) to: 

In August 2012, the SEC proposed rules to allow advertising in private placements under Rule 506 and Rule 144A.

On July 10, 2013, the SEC:

The SEC also approved final rules disqualifying securities offerings from relying on Rule 506 if certain felons or other “bad actors” participate in the offering.

These rules will be effective 60 days after their respective publication in the Federal Register. Until that date, the SEC’s existing regime regulating Rule 506 and 144A offerings remains unchanged.

The SEC also proposed new Regulation D requirements which, if adopted would, among other things:

To read the full alert, please download it here.

For more information on this issue, please contact Tim Sullivan, Michael D. Morehead or your regular Hinshaw attorney.

Tax advice disclosure: To ensure compliance with the Internal Service Regulations governing the issuance of advise on Federal Tax issues, we advise you that any tax advice in this communication (and any attachments) is not written with the intent that it be used, and cannot be used, to avoid penalties that may be imposed under the Internal Revenue Code.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.