Exercise
Answer the following questions.
1. Under Regulation D, non-accredited investors must be given access to the same organizational and financial information concerning the issuer as would appear in a(n):
A. Preliminary prospectus
B. Underwriting agreement
C. SEC registration statement
D. PPM
2. A FINRA member is selling securities in a private placement and would like to be exempt from filing a PPM, term sheet, or other offering document. Under FINRA Rule 5123, which of the following entities would the FINRA member not be able to sell to?
A. Bank
B. Non-accredited investor
C. Institutional account
D. Investment company
3. Which of the following are you unlikely to find in a PPM?
A. Outline of the company’s marketing campaign
B. Description of the issuer’s business
C. Explanation of the company’s capital and management structure
D. Description of the securities being offered
Answer true or false.
4. ____ An issuer of a private placement will compensate its employees for selling its securities.
Answers
1. C. The information given to an investor must be the same information that would appear in an SEC