Which of the following is true of private placement of securities?

Question

Quizplus · Accepted Answer

Private placement of securities involves the sale of securities to a limited number of large institutional investors, such as banks, insurance companies, and pension funds. These investors have the financial resources and expertise to evaluate the risks associated with the investment. As a result, private placements are exempt from the registration and reporting requirements of the Securities Act of 1933, and are subject to less stringent disclosure and informational requirements than their publicly issued counterparts. Public trading in these securities is not allowed, and they are not sold to the investing public at lower prices, as mentioned in options B and D. Option C is incorrect because private placements are exempt from SEC registration requirements.

Which of the Following Is True of Private Placement of Securities