SEC Softening its Stance on Private PlacementsPosted May 26th, 2011
The Obama Administration’s 2012 federal budget proposal has revived two budget proposals that recent scandals have focused a slew of regulatory attention on private placements. And with examinations of private placements recently being characterized by a FINRA executive as a “major, major initiative,” you’d hardly expect the Securities and Exchange Commission (“SEC”) to consider relaxing rules for marketing private placements.
But that’s exactly what SEC Chairman Mary Schapiro told members of Congress the agency is looking to do.
Speaking before the U.S. House of Representatives Committee on Oversight and Government Reform, Shapiro said that the SEC is going to “take a fresh look” at rules relating to private placements and other securities offerings, both public and private. Specifically, she said that the agency will reconsider the private placement public marketing ban and the 500-investor threshold at which a company is considered “public.”
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For previous coverage of private placements in Advisor’s Journal, see Private Placements Becoming Much Riskier for Firms (CC 11-78) and Private Placements Becoming Much Riskier for Firms (CC 11-78).