Relaxing the Ban: It's Time to Allow General Solicitation and Advertising in Exempt Offerings

50 Pages Posted: 2 Nov 2005  

William K. Sjostrom Jr.

University of Arizona - James E. Rogers College of Law

Abstract

The article explores the ban on general solicitation and advertising in private placements of securities. The article finds that the ban negatively impacts the ability of emerging companies to raise critical start-up and early-stage private equity capital. The article asserts that the ban is not the result of strong ideology but from the statutory distinction between public offerings and private or limited offerings entrenched by overlapping federal and state securities regulations. In light of this finding and the importance of emerging companies to the U.S. economy, the article argues that the ban should be relaxed.

Finally, the article suggests specific regulatory reforms.

Keywords: general solicitation, general advertising, private offering, private placement, emerging company, angel financing

JEL Classification: K22, K23

Suggested Citation

Sjostrom, William K., Relaxing the Ban: It's Time to Allow General Solicitation and Advertising in Exempt Offerings. Florida State University Law Review, Vol. 32, No. 1, 2004. Available at SSRN: https://ssrn.com/abstract=834244

William K. Sjostrom Jr. (Contact Author)

University of Arizona - James E. Rogers College of Law ( email )

P.O. Box 210176
Tucson, AZ 85721-0176
United States

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