Beginning December 3, 2012, members of the Financial Industry Regulatory Association (“FINRA”) will have to file with FINRA any offering documents used to conduct any private offering in which the member acts as placement agent unless there is an available exemption. Alternatively, if no offering documents are being used, the member must notify FINRA to that effect. This new rule represents another step in the efforts by FINRA and the SEC to tighten regulation of the private placement market and will particularly impact offerings by issuers (including private investment funds) to “accredited investors” who are individuals.

Partners Stephen M. Goodman and Bertrand C. Fry and counsel Michael Campoli warn that the rule must be considered in the context of these other recent FINRA and SEC initiatives and offer a detailed analysis of the heightened risk environment faced by brokers who simply treat the filing requirement as another box to check.

To read the update, entitled "FINRA Piles It On: Private Placements To Wealthy Individuals Trigger FINRA Filing Requirements," please click here.