Eccleston Law: For Investors. For Advisors
About
Who We Are
Testimonials
Disclaimers
Attorneys
For Advisors
Broker Transition
Transition Negotiations
Employment Matters
State Registration Problems & Discipline
FINRA Matters
Promissory Note Matters
Team/Parnership Disputes
CFP Board Matters
FINRA Enforcement Matters
State Registration Problems & Discipline
Transition Negotiations
Broker Litigation & Arbitration
Employment Matters
Regulatory Matters
Strategic Consulting
Whistleblower Law
Promissory Note Matters
Compliance Protection
Lawyer Referral Network
Expungement of CRD/BrokerCheck Disclosures
For Investors
Securities Fraud
Breach of Fiduciary Duty
Negligent Investment Management
Unauthorized Trading
Lawyer Referral Network
News & Articles
News
Articles
Financial Counsel Blog
Videos
Newsletter Signup
Contact
Site Menu
About
Who We Are
Testimonials
Disclaimers
Attorneys
For Advisors
For Advisors: Overview
Broker Transition
Broker Transition Overview
Transition Negotiations
Employment Matters
State Registration Problems & Discipline
FINRA Matters
Promissory Note Matters
Team/Parnership Disputes
CFP Board Matters
FINRA Enforcement Matters
State Registration Problems & Discipline
Transition Negotiations
Broker Litigation & Arbitration
Employment Matters
Regulatory Matters
Strategic Consulting
Whistleblower Law
Promissory Note Matters
Compliance Protection
Lawyer Referral Network
Expungement of CRD/BrokerCheck Disclosures
For Investors
For Investors: Overview
Securities Fraud
Breach of Fiduciary Duty
Negligent Investment Management
Unauthorized Trading
Lawyer Referral Network
News & Articles
News
Articles
Financial Counsel Blog
Videos
Newsletter Signup
Contact

SEC Issues Guidance Related to Regulation A

Posted on June 7th, 2019 at 12:23 PM
SEC Issues Guidance Related to Regulation A

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Securities and Exchange Commission (“SEC”) Office of Investor Education and Advocacy has issued an Investor Bulletin to educate investors about Regulation A. Regulation A is an exemption from registration under the Securities Act which allows companies to raise money from the public in securities offerings of up to $50 million.

According to the Investor Bulletin, Regulation A allows companies to offer and sell securities to the public, but with more limited disclosure requirements than what is required for publicly reporting companies.  Smaller companies in earlier stages of development may be able to use this rule to more cost-effectively raise money.

However, investors should be aware that such an investment will involve risks. Following are some general risks highlighted in the SEC’s Investor Bulletin:

  • Investment in startups and early-stage ventures are speculative and the business may fail. Unlike an investment in a mature business where there is a track record of revenue and income, a startup often relies on the development of a new business, product or service that may or may not find a market. It is important to keep in mind that the SEC does not pass upon the merits or give its approval to any securities offered.
  • Even though there are no resale restrictions, one may need to hold his/her investment for an indefinite period of time. If the securities are not listed on an exchange (where one can quickly and easily trade the securities), investors must locate an interested buyer to sell the investment.

Finally, the SEC advises investors to review the offering circular before making any investment decision. The offering circular will contain important information such as the risks of the investment, use of proceeds, any selling shareholders, as well as the company’s business management, performance, business plans and financial statements.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities Fraud, Compliance Protection, Breach of Fiduciary Duty, FINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, sec, regulation a, spectulative risk, illiquidity risk, investor bulletin

Share

Return to Archive

Latest Articles
FINRA Suspends Advisor Who Helped His Barred Father Service Clients
March 3rd, 2021 at 1:19 PM
J.P. Morgan Returns to Court to Block Former Advisor From Soliciting Clients
March 2nd, 2021 at 2:26 PM
Read More »
Latest News
CFP Board is the New Sheriff and it Is Not Your Friend
October 24th, 2020 at 10:04 AM
Defending Against a Customer Complaint First Requires Selecting Correct Legal Counsel
October 15th, 2020 at 10:02 AM
Read More »
Share

Request a Free Consultation

Attorneys are standing by during regular business hours. Call us now for immediate service, or complete the form below and we will contact you as soon as possible.

Your E-mail Address:
 
Chicago
55 West Monroe St.
Suite 610
Chicago, Illinois 60603
(312) 332-0000
(312) 332-0003
New York City
One Liberty Plaza
165 Broadway, 23rd Floor
New York, New York 10006
(312) 332-0000
(312) 332-0003
Boca Raton
2255 Glades Road
Suite 324A
Boca Raton, Florida 33431
(312) 332-0000
(312) 332-0003
2021 © Eccleston Law, LLC.
All Rights Reserved.
The law is continuously changing. Please do not rely on information found on this site without consulting a lawyer to determine if any recent changes in the law may have an impact.