Josh Futterman


This Note examines whether the structure of Regulation S has caused increased flowback of unregistered securities into the United States. Part I discusses the development of the offshore capital markets and the registration requirements of the Securities Act. Part I also details the evolution of the SEC's application of the Securities Act registration requirements to international securities sales, and summarizes Regulation S. Part II discusses the benefits to issuers of using Regulation S, and the effect that Regulation S has had on U.S. corporate participation in the offshore markets. Part II also analyzes the threat that flowback poses to the Securities Act disclosure requirements, and examines the mechanisms through which unregistered securities flow back into the United States. Part III argues that neither SEC enforcement efforts, nor the currently extant private remedy, can effectively curtail the flowback problem caused by Regulation S. In addition, Part III provides recommendations for amending Regulation S to ensure greater protection for U.S. investors and greater certainty for U.S. issuers in offshore transactions. This Note concludes that the SEC should revisit Regulation S in order achieve a workable balance between access for issuers and protection for investors.