The Requirement of Access to Information in Private Placements

The requirement of access to information varies depending on the circumstances. Some courts have held that this can be done by voluntary disclosure of information or effective access to such information because of employment, family relationship, or economic bargaining power. Other courts have suggested that voluntary furnishing of information does not substitute for access.

Regardless, the type of information that must be available to an investor is similar to what would be made available by registration. Such documentation could include things like a descriptions of the business, discussions of the development over the last three years (or since starting), information about products, services, competition, suppliers, intellectual property, industry regulation by the government, research and development, and legal proceedings, as well as information about the principle facilities and property of the issuer, operations, and financial information, just to name a few.

As a private offering for a small or closely held business, the information should be what is material to an understanding of the issuer and the business.

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