Mina Mar Group

Simply put general solicitation is an act of marketing capital raise publicly, but things are mot that simple. General solicitation is not precisely defined in statues and rules so Securities and Exchange Commission (SEC) takes case by case approach in case of violation "no general solicitation' requirement of Rule 506(b). It all started with JOBS Act in 2012, with purpose to make securities regulations friendlier form small businesses. General solicitation was banned since 1933 and Securities Act of 1933 in order to protect investors from scams and frauds. The Jobs Act required from SEC to amend existing and create new exemptions that will permit issuers of securities to raise capital without SEC registration. On July 19, 2013 SEC adopted amendments to Rule 506 of Regulation D. Another Rule of the same regulation, 506(b) provided issuer with conditions to rely on in order to met requirements of Section 4(a)(2) of Securities Act that exempts from registration "tr...

On July 10, 2013 the Securities and Exchange Commission adopted bad actor disqualification provision for Rule 506 of Regulation D under Securities Act of 1933, to implement Section 926 of Dodd-Frank Wall Street Reform and Consumer Protection Act. The disqualification and related disclosure provision appear as paragraphs (d) and (e) of Rule 506, of Regulation D. The Bad Actor rule prohibits company (the issuer) to use registration exemption if the issuer or any other associated person has been convicted of or subjected to judicial or regulatory sanctions for certain violation of U.S law. Exemption from registration under Regulation D helps thousand of businesses to raise capital worth billions of dollars. T he “Bad Actor” rule is codified as new paragraphs (d) and (e) to Rule 506.  Rule 506(d) provides that the exemptions in Rule 506(b) and Rule 506(c) are not available if the issuer or any associated person is statutorily disqualified. This includes all of the following: ...

Rule 506b of Regulation D is considered as a 'safe harbor under section 4(a)2. Companies conducting an offering can raise unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under rule 506b is subjected to following requirements: No general and internet  solicitation  is allowed. Marketing is limited, only to known investors. Securities cannot be sold to more than 35 non-accredited investors. There is no limitation on accredited investors. Private placement memorandum is not required but it is typically used if all investors are accredited. To non-accredited investors must be provided with disclosure that generally contain the same information as provided in registered offering. Financial statements are required for non-accredited investors. It may differ depending on the offering which are placed in three categories: offerings up to, $2 million, $7.5 million and offering above $7.5 milli...

In the United States under the Securities Act of 1933 any offer to sell securities must be registered with Securities and Exchange Commission (SEC) or meet certain qualifications to exempt them from such registration. Regulation D (Reg D) contains the rules providing exemption from registration requirements allowing smaller companies to offer and sell securities without the having to register them with SEC. Reg D allows companies to obtain funds faster and avoid costs of registration which many small companies could not bear. The SEC earlier placed many restrictions upon private placement transaction. Those restriction referred to type and limited number of investors, solicitation and reselling of securities. Regulation D was adopted in 1982 and has been revised several time since then. It has various rules prescribing qualifications needed to meet exemption from registration requirements, numbered 501 to 508. Rule 501 contains contains definitions that ...

Private placement refers to offering and selling shares in a company to a small group of buyers. The buyers are typically sophisticated investors like banks, pension funds, mutual funds, insurance companies and very wealthy investors. In the United States private placement  are subject to Security and Exchange  Commission regulation under the Securities and Exchange Act of 1933. Private placement is different from public offerings where the securities are sold on the open market to any investor. Private placement is considered a cost-effective way of raising capital without going public through IPO. Companies that want to organize public placement event don't have to be registered with the SEC if certain private placement offering requirements are met. These requirements are specified in a SEC rule called Regulation D. It also doesn't require prospectus, instead private placement are sold using a private placement memorandum and cannot be broadly marketed to the...