A private placement memorandum (PPM) is a legal document that is used to provide information about a private offering of securities to potential investors. It is a disclosure document to investors. Associated Form D is required to be filed with the Securities and Exchange Commission (SEC) for certain types of private offerings.
The PPM must include detailed information about the company, the securities being offered, the risks involved, and the fees and expenses associated with the investment. It must also be written in plain English so that investors can understand it.
The PPM is not a contract, but it can be used as evidence of what was promised to investors. If the company fails to live up to the promises made in the PPM, investors may be able to sue the company for breach of contract.
The PPM is an important document for investors to review before investing in a private offering. It provides them with the information they need to make an informed decision about the investment.
Here are some of the things that are typically included in a PPM:
A description of the company, including its business, financial condition, and management team
A description of the securities being offered, including the type of security, the amount being offered, and the price
A discussion of the risks involved in the investment
A summary of the fees and expenses associated with the investment
A subscription agreement, which is the contract between the investor and the company
Misrepresentation or omission in a PPM can form the basis for a lawsuit against the company, broker-dealers, or accountants.
If you have lost money in a private offering, it is important contact our law firm to discuss your legal options for recovery.