Preliminary Information on Misuse of the Private Placement Exemption--Section 4(2) of the Securities Act of 1933

Information was requested on the results of a GAO review currently in progress of the use of an exemption under the Securities Act of 1933. Under the Act, a securities issue must be registered with the Securities Exchange Commission (SEC) unless the issue is exempt from registration. The private placement exemption, for issues sold to investors in private transactions, states that registration requirements shall not apply to "transactions by an issuer not involving any public offering."