The SEC suggests in its final rules eliminating the ban on general solicitation that law firms may be in a position to verify accredited investor status for issuers conducting Rule 506(c) offerings.  We have begun to receive inquiries about whether we will do so.  We haven’t decided if we will, but I imagine someone will ask our securities group what this would look like.

So here are my thoughts:

[Issuer name and address]

Dear [    ]:

[Client name] (“Client”) has asked us to provide [name of issuer] with this letter to assist your determination of whether Client is an “accredited investor” as defined in Rule 501(a) promulgated by the  United Sated Securities and Exchange Commission under the Securities Act of 1933.  We draw your attention to the fact that the determination of whether a person is an accredited investor is a factual question and therefore not susceptible to a legal opinion.  Accordingly, this letter is not a legal opinion and we make no representations about whether Client is an accredited investor or whether this letter is sufficient for your purposes.

In connection with this letter, we have examined the original or photostatic copies of the following documents:

1. Joint tax returns for the years [    ] and [     ] (each, a “Tax Year”) filed by Client and [his/her] spouse on Form 1040 (the “Tax Returns”), accompanied by a certificate of the Client that that the copies of the Tax Returns provided were true, correct and complete, filed with the appropriate office of the Internal Revenue Service, prepared in full compliance with applicable law and governmental regulations and have not been amended.
2. A certificate executed by Client and [his/her] spouse, attached hereto, addressed to the Issuer and us, stating such persons have a reasonable expectation of joint income in the current year in excess of $300,000.

Based solely on the foregoing, we hereby advise you that in each Tax Year line 22 of the Tax Returns indicates income in excess of $300,000.

We have not conducted any other investigation or inquiries of Client, and have not determined whether the Tax Returns were accurately prepared, agree with source documents, were properly filed or otherwise.

By rendering this letter, we do not intend to waive any attorney-client privilege.  This letter is limited to the matters set forth herein and speaks only as of the date hereof.  Nothing may be inferred or implied beyond the matters expressly contained herein. This letter may be relied upon by you and only in connection with an offering under Rule 506(c) and only for 30 days from the date of this letter.  This letter may not be used, quoted from, referred to or relied upon by you or by any other person for any other purpose, nor may copies be delivered to any other person, without in each instance our express prior written consent.  We assume no obligation to update this letter.

Very truly yours,

[Law Firm]