Regulation D Oral Disclosures

What are your Regulation D obligations to investors for Oral disclosures?

It is OK to summarize information included in the offering memorandum as long as you give the person the offer memorandum afterwards. Which you are required to do anyway before taking any money. You need to be careful that in any conversations with potential investors that you do not discuss information or conclusions not in the offering memorandum that you presented to them. Do not say anything outside of what's in the offering memorandum. If you say something not in the PPM follow it up with a e-mail summarizing and confirming oral statements. Then add the oral statement to the offering memorandum. In the event the company is unsuccessful and a lawsuit is initiated against you your greatest protection will be the contents of the offering memorandum. It will protect you since it documents exactly what you did represent to the investor.. It will also protect you and the company in the event a broker makes exaggerations or misstatements.

Even if an offering is exempt from filing under the securities laws - called exempt offering - disclosure is still required. Regulation D. Rule 502 exemption from disclosure to accredited investors applies only to the means and magnitude of providing disclosure, it does not eliminate the disclosure requirement of 10 B-5 of the Act. You are still obligated to provide investors with all material information that is relevant to their investment decision.

No matter what type of investor it is best that you prepare for presentation to all potential investors, the offer memorandum and the signature agreement. These documents must be given to any investor before any money can be taken. In both these cases we offer templates and outlines for you to be able to prepare these documents yourself for very little money. There is no reason for you not to comply with the law.

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