If A Tree Falls In The Forest...

Over the last few weeks, many commentators have written about the potential for widespread fraud and abuse in connection with Rule 506 offerings in which general solicitation is used.  Some of these commentators have noted that if general solicitation is permitted, additional safeguards should be implemented in order to protect accredited investors.  The argument seems to go more or less as follows:  the securities laws prevented general solicitation from being used in connection with private offerings made to sophisticated purchasers and mandated that where general solicitation was permitted (i.e., public offerings), certain disclosure standards had to be met in order to ensure that investors had adequate information on which to base their investment decision.  And, the argument continues:  if general solicitation is permitted in connection with certain exempt offerings, then the accredited investor standard should be revisited and certain disclosures should be