Edward Eisert

Senior Counsel

New York


Read full biography at www.orrick.com
Edward G. Eisert, a senior counsel in the New York office, is a member of the Corporate Group. He focuses his practice on investment management, financial products and regulatory compliance.

He represents U.S. and non-U.S. domiciled financial institutions in a wide array of matters spanning his practice specialties. Ed’s experience includes the structuring and re-structuring of private investment funds and other financial products; the formation and operations of investment advisers and broker-dealers; cross-border broker-dealer, investment adviser and bank regulatory issues; and advice regarding applications of blockchain technology and the regulation of digital assets.

Before joining Orrick, Ed was the General Corporate Counsel of Fiduciary Trust Company International, a subsidiary of Franklin Templeton Investments, and also served as the initial AML Compliance Officer of Fiduciary Trust.

Posts by: Edward Eisert

When a “Public Offering” Is Not a “Public Offering”: The SEC Rule Proposal Eliminating the Ban on General Solicitation and Advertising in Securities Offerings

Introduction

On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was enacted. The stated objective for the JOBS Act is to improve access to the public capital markets for startup and emerging companies and thus increase job creation and economic growth in the United States.

Title II of the JOBS Act (“Title II”) mandated the Securities and Exchange Commission (the “Commission”) to amend applicable rules within 90 days of its enactment (i.e., July 5, 2012) in order to eliminate the prohibitions against general solicitation or general advertising (collectively, “General Solicitation”) in Rule 506 of Regulation D (“Rule 506”) under the Securities Act of 1933, as amended (the “Securities Act”), and under Rule 144A under the Securities Act (“Rule 144A”). These changes are intended to allow issuers to advertise broadly when conducting private placements and thus enable them directly to reach a greater number of potential investors at lower costs without an intermediary, subject to certain requirements, as described more fully below. For a complete overview of all provisions of the JOBS Act, please click here.

On August 29, 2012, the Commission issued Release No. 33-93544 (the “Release”) which, belatedly, proposed a new Rule 506(c) (“Proposed Rule 506(c)”) and an amendment to Rule 144A (collectively, the “Proposed Rules”) to implement Title II. The Proposed Rules would:

(i) Create Proposed Rule 506(c) which does not prohibit General Solicitation for offers and sales of securities that otherwise comply with Rule 506, provided that all purchasers of the securities are “accredited investors” and the issuer takes “reasonable steps to verify” that the purchasers are “accredited investors;”

(ii) Amend Form D5 to add a check box to indicate whether an offering is being conducted pursuant to Proposed Rule 506(c); and

(iii) Amend Rule 144A to allow securities resold pursuant to Rule 144A to be offered to persons other than “qualified institutional buyers”6 (“QIBs”), including by way of General Solicitation, provided that the securities are sold only to persons that the seller (or any person acting on behalf of the seller) “reasonably believes” are QIBs.

Comments on the Proposed Rules are due on or before October 5, 2012. A more comprehensive summary of the Proposed Rules is annexed hereto.

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