Securities Compliance, Regulation D, and ICO's

At Primum Law, our attorneys will partner with you closely to make sure your company is in compliance with Securities law. A security is a financial instrument and can include items like stocks, bonds, and loans offered for sale by an institution. Securities law is a complex legal area that is made up of three main components including transactions, regulations, and litigation and among other things regulates the process of raising capital for the companies. Our experienced securities compliance team can help you stay in compliance with your securities, whether you are making a new transaction, raising capital for your business or dealing with a lawsuit from an investor.

The federal laws that regulate securities, state that any offer or sale of a security must be registered with the SEC, unless it meets one of the exemptions.

Regulation D, a non-exclusive safe harbor that allows issuers to conduct limited offerings and sales of securities without registration under the Securities Act.

Regulation D gives effect to exemptions under different sections of the Securities Act (Sections (3)(b)(1) and imposes somewhat different conditions depending upon which section of Regulation D is being relied upon. However, in general, offers can be made to a limited number of non-accredited investors and an unlimited number of accredited investors. Rule 506 provides exemptions from registration pursuant to Section 4(a)(2) of the Securities Act for two different kinds of offerings. Rule 506(b) provides an exemption from registration for classic “private placements” that involve no general solicitation or general advertising. Rule 506(c) provides an exemption from registration for offerings sold (offers do not count) exclusively to accredited investors but allows offers to be made by means of general solicitation or general advertising. Many startups and individuals have increasingly been using initial coin offerings, or ICOs, to raise capital for their companies or business ventures. While this digital form of financing can be an efficient means for carrying out new transactions, it is not as regulated as more traditional capital markets, and is thus more susceptible to fraud and manipulation. Tokens or coins that are invested through ICOs might be considered securities, and, in this case, must be reported to the SEC as such. If you are considering funding your business through initial coin offerings, it is important to partner with an attorney who understands this area of the law, so that you can maintain your compliance with the SEC and understand whether your company still meets any exemptions under Regulation D.

When you are ready to partner with a savvy attorney who understands the ins and outs of securities compliance, Regulation D, and ICOs, turn to Primum Law. We work with clients nationally and internationally, so reach out to us today to learn more.

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