Date of Award

2017

Document Type

Dissertation

Degree Name

Doctor of Juridical Science (SJD)

Abstract

Two main objectives of the securities offering regulation are to protect investors from frauds and to facilitate capital formation. Balancing these two objectives is a difficult task particularly for the private placement regulation. The primary focus of this study is to assess whether the current private placement regulations of the United States and South Korea are properly balancing these two objectives.

First, this study broadly reviews securities offering regulations and the historical developments of the private placement regulations of the United States and South Korea, and compares the current regulations of both countries. For the U.S. private placement regulation, this study particularly focuses on Rule 506 of Regulation D under the Securities Act. Subsequently, this study gives critical assessments on the current private placement regulations of both countries, focusing on three essential factors defining the private placement, (i) investor qualifications, (ii) manner of offerings, and (iii) information requirements. This study shows that there are substantial differences between regulatory approaches of two countries in connection with these factors. It further emphasizes that neither the U.S. nor Korean private placement regulation balances regulatory objectives—posing investors at a greater risk in the private placement. Based on these discussions, this study proposes several policy considerations to achieve an enhanced balance between investor protection and capital formation in the private placement regulations in the United States and South Korea.

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