Corporate & Securities FAQs

An exempt offering under Regulation D allows companies to offer and sell securities without registering with the SEC, provided they meet specific requirements. This helps businesses raise capital more efficiently while ensuring compliance with federal securities laws.

Regulation D offers three main types of exemptions: Rule 504, Rule 506(b), and Rule 506(c). Each has different qualifications and restrictions regarding the amount of capital raised, investor types, and solicitation methods.

Accredited investors include individuals with a net worth of at least $1 million (excluding their primary residence) or an annual income of at least $200,000 ($300,000 with a spouse) for the past two years. Entities like banks, insurance companies, and certain trusts with assets over $5 million also qualify.

Form D is a notice filed with the SEC when a company sells securities under Regulation D. It includes basic information about the company and the offering. It must be filed electronically after the first sale of securities.

Yes. While full registration disclosures are not required, companies must provide sufficient information to investors to avoid fraud. Rule 502(b) outlines specific disclosure requirements for non-accredited investors in Rule 506(b) offerings.

Companies must comply with both federal and state securities laws. While certain Regulation D offerings are exempt from state registration, states can still investigate for fraud and require notice filings and fees.

The integration principle ensures that multiple offerings by the same issuer are not artificially separated to evade registration. All offers and sales within six months before and after a Regulation D offering must be considered as one if they pertain to the same class of securities or purpose.

Violations can lead to legal consequences, including rescission rights for investors and actions by the SEC. Companies may face lawsuits, fines, and damage to their reputation.

Securities purchased under Regulation D are considered restricted and cannot be freely resold without registration or an applicable exemption, such as Rule 144, which provides conditions for reselling restricted securities.

"Bad actor" disqualification prevents certain individuals or entities with past securities law violations from participating in Regulation D offerings. Waivers can be requested from the SEC, demonstrating good cause that disqualification is unnecessary.

Eligible issuers can offer and sell securities through a registered broker-dealer or funding portal that is a member of FINRA. This must be done exclusively through the platform of a single intermediary.

A broker-dealer must notify FINRA before engaging in crowdfunding offerings and may need to apply for approval of a material change in business operations if they are not already approved to engage in private placements or underwriting.

No, issuers cannot conduct offerings on their own websites. The offering must be conducted exclusively through the platform of a registered intermediary.

These are communications by issuers to gauge investor interest before filing a Form C offering statement. They are allowed under Rule 206 and must comply with specific disclosure requirements and anti-fraud provisions.

No, only issuers can engage in "testing the waters" communications, and such communications must clearly be by the issuer and conform to Rule 206 requirements.

Funding portals cannot use subjective terms like “Hot this week” or “Invest Now!” to highlight offerings. They can use objective criteria, such as investment commitments or geographic location, applied consistently and transparently.