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 usually delivered via a PPM.

Sometimes PPM (i.e., fulsome written) disclosures are required under the applicable securities registration exemption. Other times, they are a "should do" item. And there are times when they are "nice to have." It is critical to understand which category your client’s offering is in when advising the client about its securities offering.

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