8.16.1: Rule 152: Completed Private Offerings Followed by an IPO

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Abstract

Assume[1] there has been an unregistered, allegedly exempt placement closed within, say, six months of the date the issuer files a registration statement for a public offering. The public offering, even if not closed, could relate back, through integration, and disqualify the earlier placement.[2] The issue is governed by Rule 152, which states: The phrase transaction by an issuer not involving any public offering in Section 4(2) shall be deemed to apply to transactions not involving any public offering at the time of said transaction although subsequently thereto the issuer decides to make a public offering and/or files a registration statement. Release 305, accompanying the adoption of Rule 152 in 1935, states: The rule allows those who have contemplated or begun to undertake a private offering to register the securities without incurring any risk of liability as a consequence of having first contemplated or begun...