How Will SEC and FINRA Advertising Rules Apply to General Solicitations and Advertising Under Rule 506?

September 04, 2012
With the enactment of JOBS Act in April 2012, the U.S. Securities and Exchange Commission was directed by Congress to remove the prohibition in Regulation D under the Securities Act of 1933 against general solicitation and general advertising in connection with private offerings under Rule 506. On August 29, 2012, the SEC issued its proposal to revise the rules to permit general solicitations and general advertising in connection with private offerings under Rule 506, but did not propose new advertising rules or guidelines specifically relating to such offerings. This update examines the standards currently applied by FINRA and the SEC to communications in connection with private offerings, and looks ahead to possible additional rulemaking or interpretive guidance with respect to communications standards for private offerings that use general solicitations and general advertising.