Reg D for Dummies
What is the big deal about Rule 506(c?
One of the most sweeping and deep changes in securities law
in over 80 years occurred with the introduction of Rule 506(c.
As long as you sell (not offer) to accredited investors, you may
use the Internet and other public forums to market your
offering to any way you want.
A REIT recently raised over $40 million using Craigslist.com.
With Rule 506(c, it is the wild-west.
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None of this means, however, that both state and Federal law
prohibiting misleading statement or material omissions has
changed.
Securities offerings are more rigorously reviewed than most
documents for securities violations. Innocent mistakes can be
costly.
Practice Note: One reason we recommend that our clients avoid
unaccredited investors is because doing so requires you to
include additional disclosures not necessary when all investors
are accredited.
