Pitch Competitions and the Securities Laws
Issuers who conduct presentations at pitch fairs and venture capital fairs face significant uncertainty regarding SEC compliance with the rules on general solicitation.
The SEC recently released new rules that permit general solicitation; however, there are onerous filing requirements that many issuers will want to avoid. This is especially applicable to those who conduct presentations at events like pitch competitions because all changes to the materials used would have to be submitted to the SEC.
Pitch Fairs and General Solicitation
In a recent meeting, the SEC confirmed that there is no definition of general solicitation, nor is there likely to be one in the near future. The SEC also refused to elaborate on whether pitch fairs could constitute a general solicitation, stating that it would always be down to a facts and circumstances analysis.
Worryingly, a representative from the North American Securities Administrators Association (NASAA) stated that all pitch competition presentations involve general solicitation, and they are only escaping attention because pitch fairs often have close ties to state agencies.
This is an area of high uncertainty, and although the SEC has not taken action against issuers conducting pitch competition presentations to date, it may seek to do so now that there is a new regime covering general solicitation.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.