10b-5 Letter

Definition:

A disclosure letter from issuer’s counsel, and often also underwriters’ counsel, addressed to the underwriters confirming the undertaking of Due Diligence procedures regarding the preparation of an offering document. The letter states that, based on counsel’s Due Diligence procedures, there is no reason to believe such offering document contains any untrue statements of material facts or omits to state any Material facts that are necessary in order to make the statements in the offering document, in the light of the circumstances under which they were made, not misleading. This letter is intended to form one of the elements of the underwriters’ Due Diligence Defense. 

Technically, this document is not an “opinion” and is referred to as a “disclosure letter.” 

A 10b-5 Letter is also referred to as a Negative Assurance Letter. 

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