Underwriting Registered Securities Offerings


Summary

This practice note provides an overview of the role of underwriters in registered securities offerings in the United States. A company seeking to raise capital through a public (registered) offering of securities often engages one or more investment banking firms to underwrite the offering. This note discusses the types of underwritten offerings and underwriting arrangements; selecting the lead (managing) underwriter(s); formation of the underwriting syndicate; the underwriters' involvement in preparing the prospectus, marketing, pricing, and selling the offered securities, conducting due diligence, and engaging in price stabilization; underwriters' liabilities under the federal securities laws; the principal underwriting documents used in registered offerings; and review of the fairness of underwriters' compensation by the Financial Industry Regulatory Authority, Inc. (FINRA). It also discusses how you as counsel to underwriters can assist your clients in conducting these offerings.