|Posted on July 2, 2017 at 6:40 PM|
What is the big deal about Rule 506(c? One of the most sweeping and deep changes in securities law in over 80 years occurred with the introductionof Rule 506(c. As long as you sell (not offer) to accredited investors, you may use the Internet and other public forums to market your offering anyway you want. A REIT recently raised over $40 million using Craigslist.com. With Rule 506(c, it is the wild-west. None of this means, however, that both state and Federal law prohibiting misleading statement or material omissions has changed. Securities offerings are more rigorously reviewed than most documents for securities violations. Innocent mistakes can be costly. Practice Note: One reason we recommend that our clients avoid unaccredited investors is because doing so requires you to include additional disclosures not necessary when all investors are accredited.