Pre-IPO Disclosures – What is the quiet period? – (43)

communication safe harbors from enforcement of Section 5.
What is the quiet period?
Section 5(c) of the Securities Act prohibits offers or sales of a security before a registration statement has been filed. The pre-filing period begins when a company and the underwriters agree to proceed with a public offering.
From the first all-hands organizational meeting forward, all statements concerning the company should be reviewed by the company’s counsel to ensure compliance with applicable rules. Communications by an issuer more than 30 days prior to filing a registration statement are permitted as long as they do not reference the securities offering. Statements made within 30 days of filing a registration statement that could be considered an attempt to pre-sellthe public offering may be considered an illegal prospectus, creating a
“gun-jumping” violation. This might result in the SEC delaying the public offering or requiring prospectus disclosures of these potential securities law violations.
See “What is ‘gun-jumping’?”. Press interviews, participation in investment banker-sponsoredconferences and new advertising campaigns are generally discouraged during this period.
In general, at least four to six weeks will pass between the distribution of a first draft of the registration statement and its filing with or confidential submission to the SEC. To a large extent, the length of the pre-filing period will be determined by the amount of time required to obtain the required financial statements to be included in the registration statement.

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