Navigating Securities Laws And Social Media: A Guide For Syndicators

Social media in the context of Regulation D, Rule 506b and 506c, as they relate to finding investors, can be daunting. The key point is the concept of 'general solicitation' - the process of making a public offer or advertisement to potential investors. General solicitation is allowed under Rule 506c but is limited under Rule 506b, which prohibits certain marketing activities, such as holding seminars solely for the purpose of marketing an offer. The crux of the discussion lies in understanding how social media fits into these regulations. The argument is made that posting an investment offer to your social media network could potentially be considered a general solicitation, as the relationship with many social media 'friends' or followers may lack the necessary substance required to avoid regulation. Thus, it's suggested that those operating under Rule 506 B should exercise caution when discussing their offerings on social media to avoid potential penalties from the SEC or other regulatory bodies.

Read more about Reg D Rule 506b - Rule 506b of Reg D: Non-Accredited Investors & No Solicitation: https://www.moschettilaw.com/rule-506b-of-reg-d/

Read more about Reg D Rule 506c - Rule 506c of Reg D – Solicitation & No Non-Accredited Investors: https://www.moschettilaw.com/rule-506c-of-reg-d/

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