From: William K. Sjostrom, Jr.
To Whom It May Concern:
I support the proposal to adopt a new private offering exemption that does not prohibit general solicitation and advertising for transactions with certain purchasers. And I agree it needs to be structured so that securities sold under the new exemption would be “covered securities.” However, I don’t see how this can be done under Section 4(2) given statements from Commission such as the following:
“[W]e have long construed general solicitation or advertising to impart a public character to an offering. Thus, we do not believe that general solicitation or advertising is permissible in an offering under Section 4(2).” Integration of Abandoned Offerings, Securities Act of 1933 Release No. 33-7943 (Jan. 26, 2001), 2001 SEC LEXIS 166, at *19.
In my 2004 article, Relaxing the Ban: It's Time to Allow General Solicitation and Advertising in Exempt Offerings (the article can be downloaded at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=834244), I suggested instead using the definition of “qualified purchaser” to achieve the same result (see page 44). You may want to take a look at my article.
William K. Sjostrom, Jr. | Assistant Professor of Law