Private Placement Process

Summary

This practice note provides an overview of the private placement offering process, from initial preparation to post-closing, with a focus on legal counsel's role and responsibilities. Under Section 5 (15 U.S.C. § 77e) of the Securities Act of 1933, as amended (Securities Act), any offer and sale of securities must be registered with the Securities and Exchange Commission (SEC), unless an exemption from registration applies. A "private placement" generally refers to a sale of securities to preselected individuals or institutions (or both) conducted in reliance on the exemption provided by Section 4(a)(2) of the Securities Act (15 U.S.C. § 77d(a)(2)) and/or the nonexclusive safe harbor provided by Rule 506(b) or 506(c) of Regulation D.