FINRA Rule 5123 requires each FINRA member firm that sells securities in a private placement, subject to certain exemptions, to file with FINRA a copy of any private placement memorandum, term sheet or other offering document the firm used within 15 calendar days of the date of the sale, or indicate that it did not … Read more »
Category: Fundraising
How to Do Everything Wrong in a Securities Offering
I first looked at the First Choice Investments action by the Securities and Exchange Commission because it involved a real estate investment company. I thought it would be another to case to help me explore “What’s a Security“. Instead I found a train wreck, at least if what the SEC alleges is true. The company … Read more »
Make Sure Your Placement Agent is Registered
The Securities and Exchange Commission cracked down on a fund manager and its placement agent because the placement agent was not registered as a broker-dealer. The federal securities laws require that an individual who solicits investments in return for transaction-based compensation be registered as a broker. There is a fine line between a “finder” and … Read more »
Looking to Europe
A new regulatory regime is scheduled to impact fundraising in Europe starting this summer. The new regulatory structure known as the Alternative Investment Fund Managers Directive (AIFM) has a July 22 effective regulatory date. The effect will be felt if you are a EU-based fund manager or want to market to EU-based investors. For U.S.-based … Read more »
What Happens If You Violate the Ban on General Advertising and Solicitation?
I’m not planning to run late night ads for a latest security offering. But what could the Securities and Exchange Commission do about it? Keith Bishop asks: Can the SEC really create illegal actions by its own failures to comply with the law? Last year’s JOBS Act contained an explicit mandate with an explicit time … Read more »
Crowdfunding and the Ban on General Solicitation
While entrepreneurs are looking to create crowdfunding portals under Title III of the JOBS Act, small business owners looking to raise capital should keep an eye on the regulatory changes under Title II of the JOBS Act. That may do a better job of opening the spigot for capital than the avalanche of crowdfunding portals … Read more »
Crowdfunded Companies Won’t Be Here Anytime Soon
When the JOBS Act passed last spring, there was a huge surge on the future of crowdfunding. In pursuit of the riches of startup investing, many ignored the already successful world of Kickstarter, Indie Go Go, and others that already successfully fund projects. Those platforms don’t show the investor a pot of gold at the … Read more »
Private Placement of Fund Interests and Rule 5123 Filings
Under the new FINRA rule 5123, FINRA member firms that sell securities in certain private placements to submit a notice filing with FINRA. That means your placement will likely have to file a fund’s private placement memorandum with FINRA. FINRA recently released FAQs and a user guide related to Rule 5123 filings. The notice filing must include a copy of … Read more »
Filing Private Fund Private Placement Memoranda with FINRA
Starting on December 3, 2012, FINRA members must file a copy of any private placement memorandum, term sheet or other offering document the firm used within 15 calendar days of the date of the sale. Placement agents for private funds will likely be FINRA members and subject to this rule. FINRA Rule 5123 is part … Read more »
SEC Brings a Pay-to-Play Action
The Securities and Exchange Commission filed a “pay-to-play” case against Goldman Sachs and one of its former investment bankers, Neil M.M. Morrison. The SEC alleges that Goldman and Morrison made undisclosed campaign contributions to then-Massachusetts state treasurer Timothy P. Cahill while he was a candidate for governor. The case was brought under the Municipal Securities … Read more »