• SEC Relaxes Ban on “General Solicitation” and “General Advertising” in Private Securities Offerings
  • July 16, 2013
  • Law Firm: Morrison Cohen LLP - New York Office
  • Yesterday, the U.S. Securities and Exchange Commission adopted certain longanticipated amendments to two of its safe harbor exemptions for private securities offerings. The amendments had been mandated by Congress under the JOBS Act, which became law over a year ago in April 2012. The amendments, when effective, will make it possible for companies and funds to use advertising, the Internet and other forms of mass communication when marketing their securities offerings, so long as securities sales are made only to “accredited investors” (“AIs”) in conformance with Rule 506 of Regulation D under the Securities Act of 1933 (the “Securities Act”), or “qualified institutional buyers” (“QIBs”) in conformance with Rule 144A under the Securities Act. AIs include, among others, individuals with more than $1 million in net worth (excluding primary residence) or more than $200,000 ($300,000 with a spouse) in annual income in each of the last two years, and companies with more than $5 million in assets. QIBs include, among others, institutions with investments in securities of at least $100 million.