As discussed in this column on Aug. 14, 2014,1 the Securities and Exchange Commission (SEC) on July 10, 2013, adopted amendments to Rule 506 of Regulation D (Reg D) under the Securities Act of 1933 (1933 Act) which eliminate the ban on general solicitation and general advertising (hereinafter General Solicitation) of securities offerings conducted under those rules (Final Rules). The Final Rules significantly liberalize the restrictions on publicity in connection with offers of real estate securities made in reliance on the Final Rules and permit sponsors of real estate offerings to more broadly solicit investors and publicize their offerings.2 In addition, the SEC (i) adopted rules mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibiting certain felons and other bad actors from utilizing Rule 506 of Reg D3 which was discussed in this column on Oct. 10, 2014.4
In a series of changes intended to enhance the SEC’s ability to evaluate market practices in Rule 506 offerings and to address issues that may arise with general solicitations and general advertising the SEC proposed rule and form amendments (Proposed Amendments or Proposal).5 In addition, the SEC staff has begun a review of the definition of “accredited investor” to see if it should be updated.
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