Big Boy Letter

Summary

This “big boy” letter template can be used by counterparties to a securities transaction when one of the parties (commonly, the seller) is in possession of material, non-public information that the other party knows may not be disclosed during the course of negotiations. This template includes practical guidance and drafting notes. Trading while in possession of material, non-public information could expose the seller and its officers to insider trading and other securities liability. In a big boy letter, the buyer waives liability based on the knowledge, disclosure or non-disclosure of that material, non-public information. A big boy letter is optional and parties may also elect, instead of or in addition, to memorialize these waivers directly in the Purchase Agreement. For a template of Purchase Agreement, see Purchase Agreement (PIPE Offering). For more on private placements generally, see Private Placements Resource Kit.