Reg D Advertising Rules Checker

What Regulation D lets you say, and who you may say it to.

For a private real estate raise, the advertising question comes before the wording question: may this offering be advertised at all? Here is what Rules 506(b) and 506(c) say, where general solicitation starts, the antifraud layer that applies to both, and the phrases in real syndication copy that each rule catches.

What Regulation D is

Regulation D is the part of the SEC's rules under the Securities Act of 1933, 17 CFR 230.500 to 230.508, that lets an issuer sell securities without registering the offering. For a syndicator raising equity for a property, the choice is almost always between two paragraphs of Rule 506. The rule's own opening line sets the stakes: offers and sales that meet the conditions of paragraph (b) or (c) "shall be deemed to be transactions not involving any public offering." Miss the conditions, and the offering is not exempt.

Both paths share one filing. Under Rule 503, an issuer relying on Rule 506 "must file with the Commission a notice of sales containing the information required by Form D" no later than 15 calendar days after the first sale. Form D is a notice, not an approval: nothing about filing it makes the marketing acceptable.

506(b): no general solicitation

Rule 506(b) is the older path and the one most sponsors with an existing investor base use. Its price is a ban on advertising. Rule 502(c) says that "neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising," and names two examples: "any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio," and "any seminar or meeting whose attendees have been invited by any general solicitation or general advertising."

In exchange, 506(b) can take investors who are not accredited. The rule caps purchasers at no more than 35 in any 90-calendar-day period, and Rule 501(e) excludes accredited investors from that count, so in practice the cap falls on the non-accredited. Each of them, alone or with a purchaser representative, must have "such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment." That is why 506(b) copy talks about sophistication, and why it must not reach strangers.

506(c): advertise, then verify

Rule 506(c) lifts the ban. An offering under it may use general solicitation, on two conditions in the rule's own words: "All purchasers of securities sold in any offering under paragraph (c) of this section are accredited investors," and "the issuer shall take reasonable steps to verify" that they are. The public page is allowed; the sale is narrow.

The rule lists methods that count as reasonable steps for a natural person, and calls them "non-exclusive and non-mandatory": reviewing IRS forms that report income for the two most recent years with a written representation about the current year; reviewing bank, brokerage and similar statements dated within the prior three months plus a consumer report for liabilities; a written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney or a CPA who has verified the purchaser within the prior three months; and, for someone already verified, a written representation that holds for five years. In a March 12, 2025 staff letter, the SEC's Division of Corporation Finance agreed that a high minimum investment, coupled with written representations that the purchaser is accredited and that the minimum is not financed by a third party, and no actual knowledge to the contrary, can be reasonable steps.

506(b) vs 506(c), side by side

The same sentence can therefore be ordinary in one offering and a problem in the other. "Invest now in our Houston deal" on a public page is general solicitation of a specific offering: under 506(b) it breaks the ban, under 506(c) it is permitted if every purchaser is accredited and verified. This is why the Reg D pack's solicitation rule stands down when "506(c)", "accredited investors only" or "verified accredited" sits beside the phrase, and flagged when nothing does.

What counts as general solicitation

Rule 502(c)'s list is "including, but not limited to," so the medium does not decide the question. The SEC's own guide for small businesses lists "unrestricted public websites" among its examples, beside newspaper and magazine ads, television and radio, and seminars. What takes a communication outside general solicitation is a relationship, which the SEC defines in two halves: a "pre-existing" relationship "is formed before the start of the offering," and a "substantive" one "is formed when the entity offering securities (i.e., the company or its broker-dealer or investment adviser) has sufficient information to evaluate, and does evaluate, a potential investor's status as an accredited investor."

The same guide calls it "a fact-specific determination" and gives the direction of travel: "the greater the number of persons without financial experience, sophistication, or any prior personal or business relationship with the company that are contacted through impersonal, non-selective communications, the more likely the communications will be considered part of a general solicitation." In our reading, that makes the practical tests simple. A public deal page, a social post naming the raise, a podcast pitch for a live fund and a webinar anyone can sign up for all look like general solicitation. An email about a new deal to investors you have already qualified is the relationship the SEC describes; the same email to a bought list is not. The checker cannot see who received a piece. It can see the words that make the question matter.

The antifraud layer applies to both

Most explainers stop at "506(c) lets you advertise." It does not let you mislead. The antifraud provisions the packs cite, Section 17(a) of the Securities Act and SEC Rule 10b-5 (our paraphrase: no untrue or misleading statements of material fact in the offer or sale of a security), apply to every private offering whichever paragraph it relies on. A guaranteed return, "no risk", a claim that property values always go up, an interest described as liquid or freely transferable, and guaranteed tax benefits are flagged as hard under either exemption, because none of them is made acceptable by advertising being allowed.

Return figures are the everyday case. The Reg D pack flags a return percentage stated as something investors will earn, make or receive, unless a label such as "target return", "projected", "estimated" or "historical return" sits within 72 characters; the syndication pack warns on figures like "8% preferred" or "18% IRR" without one. The label has to be beside the number. "Target" in a sidebar does not qualify "earn 14%" in a headline.

Real syndication phrases, and the rule each one trips

Each phrase below was run against the rule beside it. The last three are not flagged, because an exception phrase sits next to them: that is how the packs tell a 506(c) call to action from a 506(b) one, and a labelled projection from a promise.

A real run on a syndicator's own copy

Willowdale Equity is a multifamily syndication firm run by Verand's founder, and its homepage is written the way a 506(b) sponsor's should be. The investor process asks for an application "to verify accreditation" before anyone sees a live offering, which is how a sponsor builds the pre-existing, substantive relationship the SEC describes. Below is a real run: that process section, the minimum-investment answer and the Important Disclosures block from willowdaleequity.com, pasted as published and checked against the Reg D pack.

No banned claim matched. The disclaimer was flagged, because the block covers the offer to sell, the private placement memorandum, accredited investors, forward-looking statements and past performance, but never calls itself informational. That flag may matter or it may not, which is exactly the decision a flag leaves to a person.

Common mistakes

• Treating 506(c) as permission to say anything. It permits advertising. The antifraud rules still apply to every sentence, and a guarantee is a guarantee under either exemption.
• A public call to action on a 506(b) deal. "Invest now" or "limited spots" on an open page, or in a social post, is solicitation of that offering. Keep live deals behind the relationship.
• Inviting the public to the webinar. Rule 502(c) names "any seminar or meeting whose attendees have been invited by any general solicitation." An open registration page is the invitation.
• Labelling the figure somewhere else. A return figure needs its "target return" or "projected" beside it. A note three paragraphs down does not qualify the headline.
• Checking the article, not the page. The disclaimer usually lives in a footer the writer never sees. Paste the whole rendered page, or the disclaimer will read as missing.
• Treating a clean scan as sign-off. No tool can tell you an offering is exempt or a page is allowed. This one tells you it did not find the patterns it knows.