from a SEC website basically do not need a registr

from a SEC website
basically do not need a registration statement for the private offering to Geo in 2010, Ge qualified as a private investor, having knowledge of the industry-but private investors cannot sell their restricted shares into the market without a registration statement-but there are exemptions to that requirement also as follows :

Resales of restricted securities

“Restricted securities” are previously-issued securities held by security holders that are not freely tradable because the sale transaction from the issuer to the security holders was a private transaction. After such a private transaction, the security holders can only resell the securities into the market by using an “effective” registration statement under the Securities Act or a valid exemption from the registration requirements of the Securities Act for the resale, such as Rule 144 under the Securities Act.

If holders of restricted securities want to resell using an effective registration statement, the issuing company can provide a registration statement for them to make sales in a public offering by following the process discussed above for registering a public offering of securities.

Alternatively, a holder of restricted securities can resell using an exemption. For example, Securities Act Rule 144 provides an exemption that permits the resale of restricted securities if a number of conditions are met, including holding the securities for six months or one year, depending on whether the issuer has been filing reports under the Exchange Act. Rule 144 may limit the amount of securities that can be sold at one time and may restrict the manner of sale, depending on whether the security holder is an affiliate. An affiliate of a company is a person that, directly, or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the company.

CWRN alleges Geo sold such private shares apparently in violation of some agreement w CWRN -has anybody ever seen a registration statement filed by Geo for such shares?-or any other compliance by Geo under the above exemptions-ifthe responsibility is on Geo why punish CWRN and longs- but same question applies to brokers and mm's and hedge funds etc naked shorts
also there are various other exemptions whereby a smaller co like CWRN can sell up to 1 or 5 million in a year without a registration statement- imo CWRN obviously did not violate that

Can my company legally offer and sell securities without registering with the SEC?

Your company's securities offering may qualify for one of several exemptions from the registration requirements of the Securities Act. We explain the most common ones below. You must remember, however, that all securities transactions, even exempt transactions, are subject to the antifraud provisions of the federal securities laws. This means that you and your company will be responsible for false or misleading statements that you or others on your behalf make regarding your company, the securities offered, or the offering. You and your company are responsible for any such statements, whether made by your company or on behalf of the company, and regardless of whether they are made orally or in writing.

The government enforces the federal securities laws through criminal, civil and administrative proceedings. Private parties also can bring actions under certain securities laws. Also, if all conditions of the exemptions are not met, purchasers may be able to return their securities and obtain a refund of their purchase price.

In addition, offerings that are exempt from provisions of the federal securities laws may still be subject to the notice and registration requirements of various state laws. You should make sure to check with the appropriate state securities regulators before proceeding with your company’s offering. For more information on these requirements, see “ Do state law requirements apply in addition to federal requirements? ” You can find contact information for state securities regulators on the website of the North American Securities Administrators Association.

Non-public offering (private placement) exemption

Section 4(a)(2) of the Securities Act exempts from registration "transactions by an issuer not involving any public offering." To qualify for this exemption, which is sometimes referred to as the “private placement” exemption, the purchasers of the securities must:

• either have enough knowledge and experience in finance and business matters to be “sophisticated investors” (able to evaluate the risks and merits of the investment), or be able to bear the investment's economic risk;


• have access to the type of information normally provided in a prospectus for a registered securities offering; and


• agree not to resell or distribute the securities to the public.

In general, public advertising of the offering, and general solicitation of investors, is incompatible with the non-public offering exemption.

The precise limits of the non-public offering exemption are not defined by rule. As the number of purchasers increases and their relationship to the company and its management becomes more remote, it is more difficult to show that the offering qualifies for this exemption. If your company offers securities to even one person who does not meet the necessary conditions, the entire offering may be in violation of the Securities Act.

Rule 506(b) provides objective standards that your company can rely on to meet the requirements of the Section 4(a)(2) non-public offering exemption. Rule 506(b) is part of Regulation D, which is described more fully below.

Regulation D — Rules 504, 505 and 506

Regulation D contains Rules 504, 505 and 506, which establish exemptions from Securities Act registration. The only filing requirement under each of these exemptions is the requirement to file a notice on Form D with the SEC. The notice must be filed within 15 days after the first sale of securities in the offering. Many states also require the filing of a Form D notice in a Regulation D offering. The main purpose of the Form D filing is to notify federal (and state) authorities of the amount and nature of the offering being undertaken in reliance upon Regulation D.

Some rules under Regulation D specify particular disclosures that must be made to investors, while others do not. Even if your company sells securities in a manner that is not subject to specific disclosure requirements, you should take care that sufficient information is available to investors. All sales of securities are subject to the antifraud provisions of the securities laws. This means that you should consider whether the necessary information was available to investors, and that any information provided to investors must be free from false or misleading statements. Similarly, information should not be omitted if, as a result of the omission, the information that is provided to investors is false or misleading.

Felons and other "bad actors" are disqualified from involvement in Rule 505 and 506 offerings. An issuer seeking reliance on either of these rules is required to determine whether the issuer or any of its covered persons has had a disqualifying event. The list of covered persons and disqualifying events differs for Rules 505 and 506. Issuers relying on Rule 505 must refer to the disqualification provisions of Rule 262 of Regulation A. Issuers relying on Rule 506 will find the applicable disqualification provisions in Rule 506(d). An issuer that is disqualified from these rules may still qualify to apply for a waiver of disqualification. See " Process for Requesting Waivers of 'Bad Actor' Disqualification Under Rule 262 of Regulation A and Rules 505 and 506 of Regulation D " for a description of the waiver process. We address each of the Regulation D exemptions separately below.

We address each of the Regulation D exemptions separately below.

Rule 504. Rule 504 , sometimes referred to as the “seed capital” exemption , provides an exemption for the offer and sale of up to $1,000,000 of securities in a 12-month period. Your company may use this exemption so long as it is not a blank check company and is not subject to Exchange Act reporting requirements. In general, you may not use general solicitation or advertising to market the securities, and purchasers generally receive “ restricted securities .” Purchasers of restricted securities may not sell them without SEC registration or using another exemption, which is further explained below under the heading “ Resales of restricted securities .” Investors should be informed that they may not be able to sell securities of a non-reporting company for at least a year without the issuer registering the transaction with the SEC.

Your company may, however, use the Rule 504 exemption for a public offering of its securities with general solicitation and advertising, and investors will receive non-restricted securities, under one of the following circumstances:

• It sells in accordance with a state law that requires the public filing and delivery to investors of a substantive disclosure document; or


• It sells in accordance with a state law that requires registration and disclosure document delivery and also sells in a state without those requirements, so long as your company delivers to all purchasers the disclosure documents mandated by a state in which it registered; or


• It sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as sales are made only to "accredited investors" (we describe the term “accredited investor” in more detail below in connection with our description of Rule 506 offerings).

Rule 505. Rule 505 provides an exemption for offers and sales of securities totaling up to $5 million in any 12-month period. Under this exemption, your company may sell to an unlimited number of “ accredited investors ” and up to 35 persons that are not accredited investors. Purchasers must buy for investment purposes only, and not for the purpose of reselling the securities. The issued securities are “ restricted securities ,” meaning purchasers may not resell them without registration or an applicable exemption, as explained below under the heading “ Resales of restricted securities .” If your company is not an SEC reporting company, investors should be informed that they may not be able to sell securities for at least a year without the company registering the transaction with the SEC. Your company may not use general solicitation or advertising to sell the securities.

Under Rule 505, if your offering involves any purchasers that are not accredited investors, you must give these purchasers disclosure documents that generally contain the same information as those included in a registration statement for a registered offering. There are also financial statement requirements that apply to Rule 505 offerings involving purchasers that are not accredited investors. For instance, if financial statements are required, they must be audited by a certified public accountant. You must also be available to answer questions from prospective purchasers who are not accredited investors.

You may decide what information to give to accredited investors, so long as it does not violate the antifraud prohibitions of the federal securities laws. If your company provides information to accredited investors, it must make this information available to the non-accredited investors as well.

Rule 506 . Rule 506 provides two different ways of conducting a securities offering that is exempt from registration: Rule 506(b) and Rule 506(c). Rule 506(b) is a long-standing rule. Rule 506(c) was added in 2013 to implement a statutory mandate under the JOBS Act.

Rule 506(b) . As discussed earlier, Rule 506(b) is a "safe harbor" for the non-public offering exemption in Section 4(a)(2) of the Securities Act, which means it provides specific requirements that, if followed, establish that your transaction falls within the Section 4(a)(2) exemption. Rule 506 does not limit the amount of money your company can raise or the number of accredited investors it can sell securities to, but to qualify for the safe harbor, your company must:

• not use general solicitation or advertising to market the securities;


• not sell securities to more than 35 non-accredited investors (unlike Rule 505, all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment);


• give non-accredited investors specified disclosure documents that generally contain the same information as provided in registered offerings (the company is not required to provide specified disclosure documents to accredited investors, but, if it does provide information to accredited investors, it must also make this information available to the non-accredited investors as well);


• be available to answer questions from prospective purchasers who are non-accredited investors; and


• provide the same financial statement information as required under Rule 505.

Rule 506(c) . To implement Section 201(a) of the JOBS Act, the SEC promulgated Rule 506(c) to eliminate the prohibition on using general solicitation under Rule 506 where all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that the purchasers are accredited investors.

Under Rule 506(c), issuers may offer securities through means of general solicitation, provided that:

• all purchasers in the offering are accredited investors,


• the issuer takes reasonable steps to verify their accredited investor status, and


• certain other conditions in Regulation D are satisfied.

An " accredited investor " is:

• a bank, insurance company, registered investment company, business development company, or small business investment company;


• an employee benefit plan (within the meaning of the Employee Retirement Income Security Act) if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;


• a tax exempt charitable organization, corporation or partnership with assets in excess of $5 million;


• a director, executive officer, or general partner of the company selling the securities;


• an enterprise in which all the equity owners are accredited investors;


• an individual with a net worth of at least $1 million, not including the value of his or her primary residence;


• an individual with income exceeding $200,000 in each of the two most recent calendar years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or


• a trust with assets of at least $5 million, not formed only to acquire the securities offered, and whose purchases are directed by a person who meets the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment.

Purchasers receive “restricted securities” in a Rule 506 offering. Therefore, they may not freely trade the securities after the offering, as explained below under the heading “ Resales of restricted securities .”

Section 18 of the Securities Act provides a federal preemption or exemption from state registration and review of private offerings that are exempt under Rule 506. The states still have authority, however, to investigate and bring enforcement actions for fraud, impose state notice filing requirements and collect state fees.

Regulation A

Regulation A is an exemption for public offerings not exceeding $5 million in any 12-month period. If you choose to rely on this exemption, your company must file an offering statement with the SEC on Form 1-A , consisting of a notification, offering circular, and exhibits. The SEC staff will review this offering statement.

Felons and other "bad actors" are disqualified from Regulation A. An issuer seeking reliance on Regulation A is required to determine whether the issuer or any of its covered persons has had a disqualifying event. The list of covered persons and disqualifying events appear in Rule 262 of Regulation A. An issuer that is disqualified from these rules may still qualify to apply for a waiver of disqualification. See " Process for Requesting Waivers of 'Bad Actor' Disqualification Under Rule 262 of Regulation A and Rules 505 and 506 of Regulation D " for a description of the waiver process.

Regulation A offerings share many characteristics with registered offerings. For example, purchasers must be provided with an offering circular similar to a prospectus. Just as in registered offerings, the securities can be offered publicly, using general solicitation and advertising, and purchasers do not receive “restricted securities,” as explained below under the heading “ Resales of restricted securities. ” The principal differences between Regulation A offerings and registered public offerings are:

• financial statements for a Regulation A offering are simpler and do not need to be audited unless audited financial statements are otherwise available;


• Regulation A issuers do not incur either Exchange Act reporting obligations after the offering or Sarbanes-Oxley Act obligations applicable only to SEC reporting companies, unless the company meets the thresholds that trigger Exchange Act registration ;


• companies may choose among three formats to prepare the Regulation A offering circular, one of which is a simplified question-and-answer document; and


• companies may "test the waters" to determine market interest in their securities before going through the expense of filing with the SEC.

SEC reporting companies are not eligible to use Regulation A. All other types of companies may use Regulation A, except development stage companies without a specified business (for example, “ blank check companies ”) and investment companies registered or required to be registered under the Investment Company Act of 1940. In most cases, shareholders may use Regulation A to resell up to $1.5 million of securities.

The "test the waters" provisions of Regulation A allow companies to publish or deliver a written document to prospective purchasers or make scripted radio or television broadcasts to determine whether there is an interest in their contemplated securities offering before filing an offering statement with the SEC. This gives companies the opportunity of being able to determine whether enough market interest in their securities exists before they incur the full range of legal, accounting, and other costs associated with filing an offering statement with the SEC. Companies may not, however, solicit or accept money for securities offered under Regulation A until the SEC staff completes its review of the filed offering statement and the company delivers offering materials to investors.

Accredited investor exemption—Section 4(a)(5)

Section 4(a)(5) of the Securities Act exempts from registration offers and sales of securities to accredited investors when the total offering price is less than $5 million.

The definition of accredited investor is the same as that used in Regulation D, which is summarized above. Like the exemptions in Rule 505 and 506, this exemption does not permit any form of general solicitation or advertising. There are no document delivery requirements, but all transactions are subject to the antifraud provisions of the securities laws.

Intrastate offering exemption

Section 3(a)(11) of the Securities Act is generally known as the "intrastate offering exemption." This exemption facilitates the financing of local business operations. To qualify for the intrastate offering exemption, your company must:

• be organized in the state where it is offering the securities;


• carry out a significant amount of its business in that state; and


• make offers and sales only to residents of that state.

The intrastate offering exemption does not limit the size of the offering or the number of purchasers. Your company must determine the residence of each offeree and purchaser. If any of the securities are offered or sold to even one out-of-state person, the exemption may be lost. Without the exemption, the company could be in violation of the Securities Act.

If a purchaser resells any of the securities to a person who resides outside the state within a short period of time after the company's offering is complete (the usual test is nine months), the entire transaction, including the original sales made within the required state, might violate the Securities Act.

Your company may have difficulty relying on the intrastate exemption unless you know the persons to whom the securities are offered and the actual purchasers, and the sale is directly negotiated with them. If your company holds some of its assets outside the state, or derives a substantial portion of its revenues outside the state where it proposes to offer its securities, it may also have difficulty qualifying for the exemption.

You may follow Rule 147 , a "safe harbor" rule, to ensure that you meet the requirements for the intrastate offering exemption. It is possible, however, that transactions not meeting all the requirements of Rule 147 may still qualify for the exemption.

Coordinated limited offering exemption under California law — Rule 1001

SEC Rule 1001 provides an exemption from the registration requirements of the Securities Act for offers and sales of securities in amounts of up to $5 million that satisfy the conditions of Section 25102(n) of the California Corporations Code . This California law exempts offerings made by California companies to "qualified purchasers" whose characteristics are similar to, but not the same as, accredited investors under Regulation D. The California provisions allow limited general solicitation before sales. Securities issued under this exemption are “restricted securities,” meaning they can only be resold by registration or an applicable exemption from SEC registration, as explained below under the heading “ Resales of restricted securities .”

Exemption for sales of securities through employee benefit plans — Rule 701

SEC Rule 701 exempts certain sales of securities made to compensate employees. This exemption is available only to companies that are not subject to Exchange Act reporting requirements. You can sell at least $1,000,000 of securities under this exemption, regardless of your company's size. You can sell even more if you satisfy certain formulas based on your company's assets or on the number of its outstanding securities. If you sell more than $5 million in securities in a 12-month period, you are required to provide disclosure to your employees that includes certain financial and other information. Employees receive " restricted securities " in these transactions, and may not freely offer or sell them to the public, unless the securities are registered or the holders can rely on an exemption.

Resales of restricted securities

“Restricted securities” are previously-issued securities held by security holders that are not freely tradable because the sale transaction from the issuer to the security holders was a private transaction. After such a private transaction, the security holders can only resell the securities into the market by using an “effective” registration statement under the Securities Act or a valid exemption from the registration requirements of the Securities Act for the resale, such as Rule 144 under the Securities Act.

If holders of restricted securities want to resell using an effective registration statement, the issuing company can provide a registration statement for them to make sales in a public offering by following the process discussed above for registering a public offering of securities.

Alternatively, a holder of restricted securities can resell using an exemption. For example, Securities Act Rule 144 provides an exemption that permits the resale of restricted securities if a number of conditions are met, including holding the securities for six months or one year, depending on whether the issuer has been filing reports under the Exchange Act. Rule 144 may limit the amount of securities that can be sold at one time and may restrict the manner of sale, depending on whether the security holder is an affiliate. An affiliate of a company is a person that, directly, or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the company.