Starting in mid-2009 through February 2010, this column discussed the securities law considerations in connection with the offer and sale of unregistered real estate securities using the Internet. In light of changes in Regulation D in July 20131 that eliminated the ban on general solicitation and general advertising of securities offerings conducted under Rule 506(c), the last column2 reviewed the relevant changes adopted by the Securities and Exchange Commission (SEC) as applicable to a private offering using the Internet. This column will review recent SEC guidance on Rule 506(c) offerings.
Overview of Rule 506(c)
The SEC amendment to Rule 506 of Regulation D that eliminated the ban on general solicitation and general advertising (General Solicitation) of securities offerings conducted under Rule 506(c) significantly liberalized the restrictions on publicity in connection with offers of securities made in reliance on Rule 506(c). It permits issuers to more broadly solicit investors and publicize their offerings.3 In addition, the SEC adopted rules prohibiting certain felons and other bad actors from utilizing Rule 506.4
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