Securities fraud during Regulation A offerings include fraudulent activities such as false or misleading statements about the company’s financials, business operations, or potential returns to investors and other misconduct. Investors who suffer financial harm due to fraud perpetrated during a Regulation A offering may be entitled to file a lawsuit against the company and its executives.
The IPO fraud attorneys at Silver Law Group represent injured investors across the nation in class action cases. We can evaluate what legal recourse may be available to you and advocate for your right to pursue compensation for your losses.
A “Regulation A” offering is a public offering of securities that is exempt from many of the registration requirements that the Securities Exchange Commission (SEC) requires for a standard initial public offering (IPO). While the SEC’s Regulation A exemption allows companies to raise capital from the public with a more simplified process than a traditional IPO, it still requires adherence to anti-fraud and reporting provisions outlined in federal securities laws.
Sometimes called a mini IPO, a Regulation A offering has two tiers. Tier 1 is designed for offerings of up to $20 million over a 12-month time frame. Tier 2 is intended for offerings of up to $75 million in 12 months.
For Tier 1 Regulation A offerings, companies do not have to adhere to the ongoing reporting requirements as would be necessary for a newly-public company. Companies that hold a public offering of securities under Tier 1 of Regulation A must still file an exit report with the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database within 30 days of completing the offering.
In the case of Tier 2 offerings, companies will still need to provide certain audited financial statements and ongoing reports with the SEC such as annual, semi-annual, and current event reports. Anyone can invest in a Tier 1 offering, including individual investors, institutional investors, and accredited investors. Tier 2 offerings can solicit both accredited and unaccredited investors.
Both state and federal laws protect investors from fraudulent securities sales, including those which occur during Regulation A offerings. If you suspect securities fraud in a Regulation A offering, an attorney at Silver Law Group can review your potential legal options.
Securities fraud can happen in connection with Regulation A offerings in numerous ways. Primary examples include:
When a company fails to register securities or provides false, misleading, or manipulative information in the registration process, investors can also fall prey to investment fraud. Some investors may lack the resources to conduct extensive due diligence on a Regulation A offering, making it harder to identify fraudulent practices.
If securities fraud is identified, numerous parties could be held liable for the financial losses sustained by injured investors. These could potentially include corporate officers, directors, lawyers, and underwriters who perpetrated the scheme. Third parties who were involved could be held liable in a civil lawsuit or class action, such as investment banks and other large financial institutions.
Securities fraud during a Regulation A offering can result in lasting financial harm to investors. If you suspect that a company or financial institution engaged in fraudulent activity or provided false information in connection to a Regulation A offering, you should consider speaking with legal counsel. Silver Law Group can step in to advocate for your rights and the recovery of your losses.
We aggressively advocate for victims of securities fraud around the country, and can provide information about joining pending litigation or initiating your own. Give us a call today to discuss your potential case in a confidential, one-on-one legal consultation.
