Securities Law Challenges in Mergers and Acquisitions: Using Section 4(a)(2) Exemption for Transfer or Issuance of Securities

Navigating Reg D Private Placement Exemption Requirements, Integration, Disclosures, and Solicitation of Target Shareholders

Recording of a 90-minute CLE webinar with Q&A

Conducted on Wednesday, February 15, 2017

Recorded event now available

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Program Materials

This CLE webinar will discuss securities law compliance issues attendant with M&A transactions. The program will focus on the most commonly used safe harbor for an exemption from registration under the Securities Act of 1933, Regulation D, and how it may be used in an M&A transaction. The program will discuss the requirements of Regulation D, a brief introduction on integration considerations, required disclosures, and the limitations of general solicitation and advertising to target shareholders.


A transfer of stock as part of the sale of a business in an M&A transaction is considered a securities offering under the Securities Act, as is issuance of new stock to shareholders of another company in exchange for their shares of stock. Due to costliness and the complexities of registration requirements, issuers often seek an exemption from the Act.

The Section 4(a)(2) exemption and Reg D safe harbors is the most common exemption used for stock issued as part of a merger or acquisition. Under Reg D, public solicitation and advertising is prohibited and the ability to sell securities to nonaccredited purchasers is limited. Also, the securities are restricted and subject to limitations on resale.

As penalties can be steep and mistakes can be costly to the deal, securities law implications must be carefully considered before the transaction is structured and the deal is closed.

Listen as our authoritative panel of securities attorneys examines the applicability of the Securities Act to a stock transfer or issuance that is part of an M&A deal. The panel will examine how Regulation D applies in the M&A context and the requirements, the limitations of Reg D offerings, integration, required disclosures, and the limitations on general solicitation and advertising to target shareholders.



I. Regulation D requirements

  1. Offering size
  2. Integration
  3. Required disclosure

II. Solicitation of target shareholders

  1. Reg D general solicitation and advertising
  2. Preexisting, substantive relationships
  3. Nonaccredited purchasers
  4. Restricted shares and limitations on resale


The panel will review these and other key issues:

  • When is there a sale of securities in the M&A context?
  • What are the required disclosures for non-accredited investors under Rule 502 in the M&A context?
  • What challenges arise in the M&A context with respect to soliciting target shareholders?


Anthony G. Mauriello
Anthony G. Mauriello

Special Counsel
Sheppard Mullin Richter & Hampton

Mr. Mauriello’s practice covers a broad range of general corporate matters, including counseling public and...  |  Read More

Robert L. Wernli, Jr.
Robert L. Wernli, Jr.

Special Counsel
Sheppard Mullin Richter & Hampton

Mr. Wernli has a broad transactional practice with three main areas of focus: securities, mergers and acquisitions, and...  |  Read More

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