An Example of How Securities Laws Can Be Broader than Most People Think: SEC Warns Investors of Fantasy Stock Trading Websites (Part 2)

In re Sand Hill Exchange. In re Sand Hill Exchange involved two Silicon Valley entrepreneurs, Gerrit Hall and Elaine Ou, who operated a website called Sand Hill Exchange (“Sand Hill”).[1] The SEC said that the two wanted to create a business that would involve valuing...

More Clarification on How To Raise Money Without Registration: SEC Issues Compliance and Disclosure Interpretations on Exempt Offerings (Part 4)

Intrastate Exemption. We briefly touched on the concept of intrastate exemption in our previous blog series on crowdfunding (available here). As the name suggests, intrastate offerings are transactions that do not involve interstate commerce (hence the exemption, as...

More Clarification on How To Raise Money Without Registration: SEC Issues Compliance and Disclosure Interpretations on Exempt Offerings (Part 3)

General Solicitation. As we discussed in our previous blog series on exempt offerings (available here), absence of general solicitation is a condition to be met in most exempt offerings, with limited exceptions, such as offering under Rule 506(c).  This is important...

More Clarification on How To Raise Money Without Registration: SEC Issues Compliance and Disclosure Interpretations on Exempt Offerings (Part 2)

Verification of Accredited Investor Status. The next set of questions are related to the requirement under Rule 506(c) that an issuer take reasonable steps to verify, and form a reasonable belief regarding, the accredited investor status of a purchaser at the time of...