Private Placements: A Theoretical Assessment of SEC
No-Action Letters

Abstract

Private placements are important to most private equity funds, since their securities offerings usually rely upon Rule 506 promulgated pursuant to Regulation D under the Securities Act of 1933 (“Securities Act”). However, despite the importance of private placements under the Securities Act for private equity funds, the precise boundaries of private placements are amorphous and are not well understood. This article attempts to ascertain the boundaries of valid private placements under the Securities Act, with a focus on issues that private equity fund sponsors will encounter.