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89 Tul. L. Rev. 719 (2014-2015)

handle is hein.journals/tulr89 and id is 765 raw text is: COMMENT Reaching the Right Investors: Comparing Investor Solicitation in the Private-Placement Regimes of the United States and the European Union Elan W Silver* The JOBSAct of 2012 ordered the removal of the long-standing prohibition on general solicitation forprivate offers ofsecurities directed solely at accredited investors. This change led to the promulgation of the promising SEC Rule 506(c). To take advantage of this safe harbor, however, issuers must veify each investor accredted status. Most indiiduals can attain accredited status only if their annual income orlevel of wealth exceeds certain thresholds, a rule that has remained largely unchanged for over thirty year. As the ling of the general solicitation ban presents both opportunity and hazard to private securities markets, this Comment, drawing on securities law of the European Union and the United Kingdom, suggests two alterations to draw out the benefits and limit the lisk of the JOBSAct modification. First, to increase investor protection and expand the pool of possible investors, the definition of the accredited investor should be altered to include sophisticated investors experienced in or knowledgeable ofsecunrties markets. Second to lint costs of verification andincrease investor confidence, a regulated central database ofaccreditedinvestors should be created I. INTRODUCTION ............................................................................. 720 1I. EXEMPT OFFERINGS AND THE RIGHT INVESTORS IN THE UNITED STATES AND THE EUROPEAN UNION .............................. 723 A. United States: Regulation D andAccredited In vestors .............................................................................. 723 B. European Union: Prospectus Directive and Qualified Investors ............................................................. 729 C Com paison ........................................................................ 732 III. COMMUNICATIONS WITH INVESTORS IN THE UNITED STATES AND THE EUROPEAN UNION ............................................ 735 A. United States: The Regulation D General Solicitation Prohibition ...................................................... 735 B. European Union: Member State Regulation .................... 741 * © 2015 Elan W Silver. J.D. candidate 2015, Tulane University; B.A. 2011, Pomona College. I would like to thank Onnig H. Dombalagian for his comments and guidance; the editorial boards and staffs of volumes 88 and 89 of the Tulane Law Review, and my parents, to whom this Comment is dedicated, for their unwavering support. 719

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