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What Are Private Securities?

What Are Private Securities?

 Section 5 of the United States federal Securities Act of 1933 generally provides that it is unlawful for any person to sell its securities unless there is a “registration statement” in effect.  The process of filing a registration statement with the SEC is long, arduous, and expensive.  At the end, your securities are traded on an exchange like the NYSE or NASDAQ, and you are a company like Apple or Exxon.  Fortunately, there are exemptions in the securities laws that allow for the sale of securities other than pursuant to a registration statement.  These securities are “private”, and the general rule under Section 4(a)(2) of the Securities Act is that Section 5 does not apply to “transactions by an issuer not involving any public offering.”  Filing a registration statement with the SEC might cost $1 million in legal fees alone.  A good securities attorney can help you lawfully raise money for your business for a fraction of that cost.

Using Advertising To Sell Your Securities

Using Advertising To Sell Your Securities

 It truly is an exciting time to be a securities lawyer.  In the past, advertising has been prohibited in connection with any offer and sale of private securities.  To unpack the significance of that statement, you have to understand what private securities are, and then also understand how the internet allows us to use technology for advertising in completely new ways.  Through the use of the internet and very recent changes in the US and state securities laws, we can now sell securities in ways that have never been possible before.

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