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September 13, 2013

Brian Koscak, EMDA - Selling To Accredited Investors – You Better Get It Right!

Private Capital markets are seen to be exciting but also fraught with danger. Industry players know that they need to keep the industry as transparent as possible and as safe as possible for investors. The grandmother with her retirement nest egg needs to be ensured that her savings are not getting stolen. Just as the food industry gets government regulation to keep everyone on a straight track, so does the private capital market. The industry has created an association - the EMDA. The Chair is the dynamic, and irrepressible, Brian Koscak, partner at Cassels Brock. Here is Brian's view on accredited investors:

How many times have you seen this situation? You have an attractive investment opportunity that you would like to bring to the attention of a potential investor but they are reluctant to provide you with the details of their full financial picture. You believe they are an accredited investor (AI) but you are not sure. You need to get this right since you can only do the private placement in reliance on the accredited investor exemption (the AI exemption) set out in section 2.3 of National Instrument 45-106 – Prospectus and Registration Exemptions (NI 45-106). What do you do? Does it matter if you get it wrong?
Canadian securities regulators are increasingly concerned that issuers and exempt market dealers (EMDs) are getting it wrong and selling exempt securities to non-AIs – the public. Continue reading at the EMDA website.
 By: Brian Koscak, EMDA Chairman and Partner, Cassels Brock & Blackwell LLP
Afzal Hasan, Associate, Cassels Brock & Blackwell LLP
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