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Regulation D Oral Disclosure Requirements

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 offering memorandum afterward. You are required to give the investor the PPM 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 an 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 your greatest protection will be the contents of the offering memorandum. The PPM will protect you since it documents state exactly what you did represent to the investor. The PPM 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 a presentation to all potential investors, which is the offering memorandum and the signature agreement. These documents must be given to any investor before any money can be taken.

Private Placement Memorandum Explained. Click Here

Call Mr. Lance Shields at 239-300-9875  /  This email address is being protected from spambots. You need JavaScript enabled to view it.

Shields Capital Partners

3606 Enterprise Avenue

Naples, FL 34104

Hours: (M - F 10:30am - 6:00pm Eastern)


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