Section 4(a)(7) - sustany/dvg GitHub Wiki

Section 4(a)(7) of the Securities Act is the codification of Section 4(1 �). That is, Section 4(a)(7) allows an individual who holds a security issued in a private placement whose resale is restricted to resell that security in a subsequent private sale.� Find the statutory text in 15 U.S.C. 77d(a)(7), (d).�

Under Section 4(a)(7), an individual who is not an issuer may privately resell a security if the following conditions are met:�

• the purchasers are accredited investors within the meaning of Regulation D.
• the seller does not generally solicit the securities;
• if the initial issuer of the security is a non-reporting issuer, then the seller and prospective purchaser must have access to basic information on the issuer;
• the seller is not a �bad actor� under Rule 506(d)(1) under Regulation D;
• the initial issuer of the security is not in bankruptcy, a blank check company, or a shell company;
• the securities cannot be part of an unsold allotment to an underwriter; and
• the securities must have been outstanding for at least 90 days prior to their resale.