Securities and Exchange Comission Regulation D & How it Affects Private Placement Investing

When you invest in private placements, you are essentially investing in unregistered securities. While the Securities Act of 1933 means that most offers to sell securities must be registered with the Securities & Exchange Commission, Regulation D contains the SEC’s rules for companies to sell securities without registering them with the SEC. So, any company that wants to offer pre-IPO private placements would have to meet exemptions outlined in Regulation D.

Are Regulation D Offerings Risky Investments?

Investors should be very careful about investing in these kinds of Regulation D offerings, as they can be extremely risky. For example, if you invest in a private placement with a company, it could be impossible to sell those shares later because they are not traded on any of the public stock exchanges. If the company fails to complete an IPO offering, you could lose everything you invested in the private placement.

How To Avoid Problems With Regulation D Investments

To avoid the problems with private placements and Regulation D offerings, be sure you understand how it works, who you are dealing with, and what will happen with your money. If you feel that you have been taken in by private placement investment fraud or have been the victim of stockbroker misconduct, contact an experienced and respected investment fraud lawyer today.