This column continues the discussion1 of the offer and sale of unregistered tax advantaged securities using the Internet, discussing the use of third-party service providers in soliciting investors in unregistered securities pursuant to Regulation D and reviewing the SEC’s views on electronic filings and private placements.
Issuer pays for information to be published. An individual proposed to publish “The Texas Investor Newsletter” and circulate it to about “2,000 Texas only accredited investors.” The newsletter “would consist of 150-word factual blurbs written by the principals of tax advantaged investments.” The principals would pay for this, but “eventually, the accredited investors would pay for the newsletter.” The staff concluded that the “publication of the described material would constitute general advertising on behalf of an issuer to offer or sell securities in contravention of Rule 502(c).”2
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