Section 4(2) Private Offering Exemption of the Securities Act of 1993 Is Conditioned on Either Actual Disclosure Of, or Effective Access To Information Through a Privileged Relationship Between the Offeree and Issuer



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Texas Tech Law Review


Analyses the United States Court of Appeals for the Fifth Circuit’s case Doran v. Petroleum Management Corp. The court in Doran held that for the private offering exemption of section 4(2) of the Securities Act to apply one of two prerequisites needed to be met. “The issuer must show that there was either actual disclosure of the information that registration with the SEC would provide the investor or, absent disclosure, that the offeree had effective access to such information.” Additionally, if relying upon the latter option, the issuer must show that the offeree was in a privileged position relative to that issuer. The author lauds this opinion for not “sacrificing the protection of the investor for which the Securities Acts were enacted.”



Securities, Securities regulation, Private offering exemption, Section 4(2), Doran v. Petroleum Management Corp., Case note


9 Tex. Tech L. Rev. 343