SEC Adopts Rules to Permit General Solicitation and Advertising in Certain Private Securities Offerings, Adopts the “Bad Actor” Disqualification and Proposes New Private Offering Filing and Disclosure Requirements
On July 10, 2013, the Securities and Exchange Commission adopted (i) amendments to Rule 144A under the Securities Act of 1933, as amended and Rule 506 of Regulation D under the Securities Act to permit use of general solicitations and general advertising in private securities offerings made pursuant to such rules, subject to the satisfaction of certain conditions, and (ii) amendments to Rule 506 to disqualify certain “bad actors” from conducting private placements in reliance upon such rule. In addition to the final approval of these new rules, in response to concerns relating to possible abuse of the offering flexibility afforded by the elimination of the prohibition on general solicitation and general advertising for certain private placements, the SEC proposed amendments to Rule 506 that, if adopted, would impose new filing and disclosure requirements on private offerings made in reliance upon such rule.