SEC and State Compliance Part 4: Why Puffery Shouldn't Be in Your Private Placement Memorandum

When you're creating private placement memorandums for your clients, have you ever wondered, "How much of what we're saying is mere puffery?" Puffery is a broad, optimistic statement made by someone raising funds. While it's not harmful in itself, the problem arises when it starts to cross the line into falsehood. For instance, saying "the Austin market is hot right now" is fine, but making specific claims about underperforming product lines can land you in hot water with the SEC. The key is to be factual and stay away from overly optimistic statements, especially in your private placement memorandum. This document should not be a selling tool, but a means to protect you and inform your investors about the risks and terms involved. Always keep its content factual and objective.

Read more about PPMs - What is the purpose of Private Placement Memorandum (PPM)?: https://www.moschettilaw.com/do-i-need-a-ppm/

Read more about the SEC and Reg D - The SEC And It’s Reg D: https://www.moschettilaw.com/sec-reg-d/

Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, as well as private equity firms. Our attorney, Tilden Moschetti, is determined to keep the firm’s ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory churning out private placement memorandums or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers with Tilden Moschetti without making you book an official appointment or get passed along to associates or paralegals. We’ll work with your ambitions and overall vision to help you close the current deal and fill in that ‘missing’ piece – whatever you need – to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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