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A Seismic Shift In The Securities Laws: The Elimination of the Ban on the Use of General Solicitation or General Advertising in Certain Private Placements, and What It Means for Issuers, Accredited Investors, and Crowdfunding

Effective September 23, 2013, the 80-year ban on the use of general solicitation or general advertising (GSGA) in connection with offers for certain private sales of securities in the United States will be eliminated. Our memorandum A Seismic Shift In The Securities Laws: The Elimination of the Ban on the Use of General Solicitation or General Advertising in Certain Private Placements, and What It Means for Issuers, Accredited Investors, and Crowdfunding explains the new rules and the impact they will have on the market for private fund-raising activities in the US. The elimination of the ban on GSGA was prescribed in the Jumpstart our Business Start-ups Act (JOBS Act).