Structuring a Private Placement Memorandum for the Private Offering and Sale of Securities

Description

In private securities offerings, issuers of securities often give investors written disclosures containing material facts about the offering, the issuer and the risks associated with the investment. The disclosures are often delivered via a PPM.

Sometimes PPM (i.e., fulsome written) disclosures are required under the applicable securities registration exemptions. Other times, they are a “should do” item. And, there are times when they are a “nice to have.” Understanding which category your client is in when advising them about a securities offering is critical.

PPM disclosures are often similar to disclosures required in registration statements for registered offerings of securities. Registration statements for companies in the issuer's industry can be a helpful reference. A formal, required PPM must meet the disclosure requirements of Rule 502(b)(2) of Reg D and contain certain key information. At times, counsel will need to help the client make challenging decisions about whether certain information is material and needs to be disclosed.

Counsel assisting in drafting or reviewing the PPM must conduct thorough due diligence to identify material information about the issuer and its business and the relevant risks inherent in the issuer's business plan and industry.

Listen as our authoritative panel of securities attorneys walks you through the attorney's role in drafting and reviewing the PPM for the private sale and solicitation of securities. The group will examine the applicable SEC disclosure rules and consider potential pitfalls and red flags. The panel will also discuss disclosures under applicable state laws.