On April 16, 2011, at the American Bar Association Business Law Section’s Spring Meeting in Boston, representatives of the Financial Industry Regulatory Authority (“FINRA”) announced that the Board of Governors had approved a reproposal of the recent proposal by FINRA to expand FINRA Rule 5122 to govern all private placements in which a member firm participates—not just those in which the member firm (or its control entity) is the issuer. The reproposal is in response to the 35 comment letters that addressed the original proposal.

The most critical proposed revisions for participation of broker-dealers in offerings of unaffiliated entities are...