|November 8, 2011 | Stroock Special Bulletin|
|"FINRA Proposes Rule 5123 Requiring Additional Disclosure in Connection with Certain Private Placement Offerings"|
|By: Hillel M. Bennett, Lior J. Ohayon and Lidia Kratz
On October 4, 2011, the Financial Industry Regulatory Authority, Inc. ("FINRA") proposed Rule 5123. Proposed Rule 5123, subject to certain exemptions, requires FINRA members and associated persons of members that offer or sell certain securities through private placements or participate in the preparation of private placement memoranda ("PPM"), term sheets or other disclosure documents related to such offerings, to provide detailed information to investors regarding the anticipated use of offering proceeds, the amount and type of offering expenses and the offering compensation, and to file a copy of the PPM, term sheet or other such disclosure document with FINRA no later than 15 calendar days after the date of first sale.
This Stroock Special Bulletin summarizes key provisions of the proposed rule.