Private Placements in Florida After the National Securities Markets Improvement Act of 1996

This article examines the state and federal securities laws applicable to this hypothetical. The first part of this article provides a general overview of the Florida Securities and Investor Protection Act (Florida Securities Act) and then describes the exemption for private placements in Florida, including the right of purchasers to rescind sales made pursuant to this exemption. This part also examines an often overlooked aspect of compliance with the Florida Securities Act—the possibility that the issuer or the persons selling the securities on behalf of the issuer may need to be registered as a “dealer” under the Florida Securities Act. The second part of this article reviews NSMIA and its preemptive effect on state regulation of private placements conducted in accordance with the federal safe harbor provided by Rule 506. The final part of this article reviews and answers the above hypothetical and concludes by arguing against any attempt to require an issuer placing its own securities in a Rule 506 offering to be registered as a “dealer” under the Florida Securities Act.