The SEC’s Division of Corporation Finance recently issued an interpretive letter[1] providing additional insight as to what constitutes “reasonable steps” to verify an investor’s accredited investor status under Rule 506(c) of Regulation D, a private offering exemption that permits general solicitation. Compared to Rule 506(b), which does not permit general solicitation, Rule 506(c) is

Stephen T. Mears
Stephen T. Mears is a partner in the Corporate Department and co-head of the Private Funds Group. He concentrates on private investment funds, including venture capital, growth equity and buyout funds. He represents fund sponsors in all aspects of fund formation, operation and management, including fund structuring, portfolio investments, sales and distributions, internal governance and management, regulatory compliance and ongoing maintenance and administration. Stephen also represents institutional investors in connection with their participation in private investment funds.
Stephen has recently represented sponsors in raising funds ranging in size from under $100 million to over $2.5 billion.
SEC Expands the “Accredited Investor” and “QIB” Definitions and the Permitted Scope of “Testing the Waters”
The Securities and Exchange Commission (“SEC”) has approved amendments that will facilitate the ability of funds and other issuers to raise capital through private placements. On August 26, 2020, the SEC adopted amendments to expand the definition of “accredited investor” found in Rule 215 and Rule 501(a) of Regulation D under the Securities Act of…
SEC Adopts a More Principles-Based Approach to Public Company Disclosure Requirements
On August 26, 2020, the Securities and Exchange Commission adopted amendments to Regulation S‑K that simplify and modernize the disclosure requirements relating to description of business, legal proceedings, and risk factors, which apply to public company registration statements and periodic reports. While the amended rules will require additional disclosure in some cases, several existing disclosure…
Treasury Issues Final CFIUS Rules Implementing FIRRMA: Updates to the Proposed Rules and Where FIRRMA Landed
On January 13, 2020, the U.S. Department of Treasury issued final regulations (the “Final Rules”) that implement most of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). While the Final Rules provide some important clarifications to the proposed rules (the “Proposed Rules”) issued on September 17, 2019 (see our alert here), the…