The Exempt-Transaction Framework
Chapters in this video
- 0:00 The Securities Act of 1933 registration fortress
- 1:28 Exempt security vs exempt transaction
- 2:56 Burden of proof on the issuer claiming exemption
- 3:00 No-public-offering exemption and Ralston Purina factors
- 4:53 Private defines buyers, not secrecy of the pitch
- 5:58 Regulation D safe harbor and bright-line conditions
- 6:32 Losing the safe harbor: falling back to statutory facts and circumstances
- 7:43 Accredited-only $5 million statutory exemption
- 8:05 Rapid-fire exam recap
What this video covers
- Why the exemption belongs to the transaction, not the security, and why a restricted share needs a new exemption every time it resold
- Who bears the burden of proof when the Securities and Exchange Commission (SEC) challenges an exemption claim, and why the issuer is always holding the bag
- The four Ralston Purina factors for the no-public-offering statutory exemption: sophistication, access to information, number and manner of offerees, and relationship
- Why the word "private" in private placement defines who may buy, not who may hear about the deal, and why general solicitation does not automatically kill the exemption
- How Regulation D operates as a safe harbor under the no-public-offering exemption, converting squishy facts-and-circumstances into bright-line conditions
- What happens when an issuer fails a specific Regulation D condition: loss of the safe harbor, not automatic loss of the underlying statutory exemption
- The accredited-only $5 million statutory exemption: its hard dollar cap, its prohibition on general solicitation, and how the exam baits you to confuse it with Regulation D
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 79 course also includes adaptive practice questions and spaced-repetition flashcards.