• The Path Opens for General Solicitation in Rule 506 and Rule 144A Offerings
  • October 10, 2012 | Authors: Michael T. Campoli; Bertrand C. Fry; Stephen M. Goodman
  • Law Firm: Pryor Cashman LLP - New York Office
  • Adhering to a mandate set forth in Section 201(a)(1) of the Jumpstart Our Business Startups Act (the “JOBS Act”), the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) on August 29, 2012 proposed rules to eliminate the prohibition against “general solicitation” and “general advertising” in certain offerings of securities conducted pursuant to Rule 506 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The proposed rules would also amend Rule 144(d)(1) promulgated under the Securities Act to provide that securities may be offered pursuant to Rule 144A to persons that do not satisfy that rule’s definition of “qualified institutional buyer” (“QIB”) so long as such securities are sold only to persons that are, or that the seller (or any person acting on its behalf) reasonably believes are, QIBs.