Direct Public Offerings And The Internet
In today’s financial environment, many Issuers are choosing to self underwrite their public offerings, commonly referred to as a Direct Public Offering (DPO). Moreover, as almost all potential investors have computers, many Issuers are choosing to utilize the Internet for such DPO’s. The Securities and Exchange Commission (SEC) has published rules for utilizing the Internet for an offering.
To comply with the SEC rules for electronic use, an Issuer must comply with the following minimum rules, among others:
- An electronic prospectus must provide the same information as a paper written prospectus;
- The Investor must elect to receive electronic delivery of the prospectus and must be provided with personal access codes to access electronic materials over the Internet;
- The Investor must pre-qualify to receive the offering materials (such as being in a particular state, being accredited, etc.) prior to receiving access codes;
- The Investor must be immediately notified of any amendments or changes in the offering documents; and
- The Issuer must
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