The most prestigious law school admissions discussion board in the world.
|
 |
 
|
Still Up from last night, learning SecReg. Noon decision. ITT, assess my grasp
Poast new message in this thread
Date: February 3rd, 2016 7:25 AM Author: pea-brained dysfunction filthpig whether I "get it"
It'd help if it were interactive, since this is, you know, time sensitive
http://tinychat.com/ralstonpurina |
Date: February 3rd, 2016 7:29 AM Author: plum pit what are you deciding at noon (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742470) |
|
Date: February 3rd, 2016 7:38 AM Author: Ebony set toaster We've already told you to drop the class. You seem determined to convince yourself to take it. So just slide and let do (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742486) |
 |
Date: February 3rd, 2016 8:48 AM Author: pea-brained dysfunction filthpig I was convinced to stay up to TRY to learn it. But if I'm completely lost, then I'd take your advice and drop it. That was always an option; otherwise, I would've taken your advice and gone to sleep hours ago. (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742743) |
|
Date: February 3rd, 2016 7:41 AM Author: Low-t boistinker mediation Company X sells a total of 1,500,000 shares to investors 1, 2, and 3 at $1 per share via a private offering under reg d. The investors 1 and 2 are accredited investors. Investor 3 is not accredited but is sophisticated. The offering documents include a 3 page business plan summary and and an audited financial statement. The company makes itself available for any questions from the investors.
What rule under reg d is best for them? Any problems? |
|
Date: February 3rd, 2016 8:00 AM Author: Low-t boistinker mediation (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742532) |
|
Date: February 3rd, 2016 8:11 AM Author: Low-t boistinker mediation (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742569) |
|
Date: February 3rd, 2016 8:33 AM Author: Low-t boistinker mediation (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742683) |
|
Date: February 3rd, 2016 8:46 AM Author: pea-brained dysfunction filthpig Sorry, didn't see this. Was absorbed in scholarship and the bort was flooded w/ PoliSci poasts. Didn't think someone on XO would actually come through. Ty for bumping, and please ask another!
1. R505 doesn't really care about sophisticated but not accredited, and at first blush this TransX would seem to qualify because it's under the $5m cap and <35 buyers (only 3).
2. But wrt Investor3, even if he's not accredited, he can come under R506 if Company X reasonably believes that he's well-versed enough in business/financial matters to adequately assess the merits and risks of the offering, sorta like the bros in Ralston Purina.
So, even if he's not R501-accredited (e.g., net worth too low), he doesn't destroy Company X's ability to use R506.
Although R505 appears to better suit Company X because it doesn't inquire into whether Company X reasonably believes Investor 3 is a knowledgeable finance alpha, R506 is actually more flexible because it leaves open the possibility that Company X may use R506 to privately place more shares; with R505, it may run into the $5m cap over 12months via aggregation.
Moreover, R506d appears to grant the SEC less discretion in DQing Company X as a private offeror under R262, because R506d provides that Company X would be DQ'd only upon final judgment; R505 apparently lacks an analogous provision.
Regardless of whether R505 or R506 is chosen, Company X may run into R502b disclosure problems: Although Investor 3's presence does not negate Company X's abilitity to use RegD, the fact that he's not R501-accredited means that Company X will have to comply with R502b's affirmative disclosure requirements.
The offering documents as currently drafted may suffice, or not. The mere fact that Company X stands ready to answer any questions would not satisfy its R502b disclosure duties if, in an analogous context, standing ready to answer questions cannot obviate a broker/issuer/investment advisor's disclosure duties. |
|
Date: February 3rd, 2016 8:55 AM Author: Low-t boistinker mediation Seems like a solid answer, dude. You even got the increased disclosure due to non accredited investor thing. I assume that's r502. (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29742773) |
|
Date: February 3rd, 2016 9:12 AM Author: pea-brained dysfunction filthpig Heh, thanks. I was *supposed* to have read about R506 & R144 in another class, but I truly knew nothing about SecRegs until ~18hrs ago.
In that time, I've run into Sec3, Sec4a2, Sec5b1, Sec5b2, Sec10a, Sec10b, R405, and R433 for Free Writing Prospectuses enough times that I've more or less internalized them already.
It doesn't take a genius to know what R506 says (altho it may take a bit more to know its interplay w/ R501 & R502).
Can you ask another, something that's not hard-wired into SEC Regs? Maybe something that "required" the courts' "assistance." Like some doctrine that emerged through caselaw (like Ralston Purina but more obscure).
Then I'm gonna look over a practice exam and either poast my outlined answer later today or pepper angus. |
|
Date: February 3rd, 2016 10:32 AM Author: pea-brained dysfunction filthpig 11th hour bump (literally) (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29743295) |
|
Date: February 3rd, 2016 11:06 AM Author: Low-t boistinker mediation I'm not a securities masterman, unfortunately. Bump for you. (http://www.autoadmit.com/thread.php?thread_id=3117039&forum_id=2#29743461) |