Rule 10b-5

Definition:

An antifraud rule under the Exchange Act that makes it unlawful to issue materially misleading statements or omit material facts in connection with a sale or purchase of securities.

Typically, a 10b-5 Letter will be prepared by issuer’s counsel. This 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.

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