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A Theoretical Assessment of Private Placements under Rule 506

42 Pages Posted: 9 Aug 2013 Last revised: 13 Oct 2015

Seth Chertok

Peking University School of Transnational Law

Date Written: September 1, 2011

Abstract

This article set forth the compliance parameters of general solicitations and general advertising in Rule 506 private placements, as they existed in 2011. This article called for weaker general solicitations and general advertising requirements in Rule 506 private placements. On July 10, 2013, the SEC revised Rule 506 private placements, as this article predicted. Under the SEC’s revisions, an amendment to Rule 506 permits an issuer to engage in general solicitations or general advertisings in offering and selling securities pursuant to Rule 506, provided that all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that such purchasers are accredited investors.

Keywords: Private Placements, Securities Act, General Solicitations, General Advertisements

Suggested Citation

Chertok, Seth, A Theoretical Assessment of Private Placements under Rule 506 (September 1, 2011). New York University Journal of Law and Business, Vol. 8, No. 1, p. 77, Fall 2011; Penn State Law Research Paper No. 37-2013. Available at SSRN: https://ssrn.com/abstract=2307176

Seth Chertok (Contact Author)

Peking University School of Transnational Law ( email )

China

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