Although greatly anticipated, rulemaking to lift the longstanding ban on advertising private offerings has been met with a tepid response. The hesitancy of issuers to use the new exemption likely stems from concerns they have with verifying accredited investors, says Keith Higgins, director of the Securities and Exchange Commission’s Division of Corporation Finance
Speaking before the annual Angel Capital Association Summit this week, he addressed the JOBS Act’s elimination of the prohibition against general solicitation and advertising in Rule 506 private offerings. Lifting the ban, in place since the early days of the Securities Act of 1933, was “a watershed moment” for companies desiring to communicate more freely and broadly about their private securities offerings, Higgins said.
