Asked by Diana Morrissey on Jun 27, 2024
Verified
Jereboah Company is a nonpublic company that wants to sell $2.7 million of preferred shares under Rule 506 of Regulation D of the Securities Act of 1933.Jereboah plans to sell to 42 investors,including 10 mutual funds.The other 32 investors are individual investors with various levels of experience in making securities investment decisions.Jereboah also hopes to attract additional investors using an advertisement in The Wall Street Journal.May Jereboah use Rule 506? Assuming it can,what disclosure must Jereboah make to the investors?
Rule 506
A provision of the Securities Act that allows companies to raise unlimited capital through private placements without extensive registration with the SEC.
Regulation D
A set of SEC regulations offering exemptions from the registration requirements for certain private placements of securities.
Securities Act of 1933
A U.S. law enacted to regulate the offer and sale of securities, primarily aimed at preventing deceit, misrepresentations, and other fraud in the securities industry.
- Recognize the procedures and standards for registering securities and their exemptions.
Verified Answer
Learning Objectives
- Recognize the procedures and standards for registering securities and their exemptions.
Related questions
Jargons Company Is a Well-Known and Seasoned Public Issuer of ...
Securities Sold Under Regulation a Must Be Registered If They ...
Which of the Following Would NOT Be Exempt from Registration ...
Any Security Offered or Sold to a Permanent Resident of ...
In Most Situations, an Issuer of Securities Usually Files a ...