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Disclosure meets investor protection at AIG …

DO NOT ENTER sign

Sometimes balancing the push for transparency and the push for investor protection can yield some strange results. Take, for example, the 8-K filed yesterday by American International Group.

In it, AIG discloses details of a global offering of shares proposed for listing its AIA Group Ltd. on the Stock Exchange of Hong Kong. The much-anticipated offering has gotten plenty of press, and, apparently, has found plenty of investor demand. Accompanying the filing was a five-page press release and a nearly 70-page preliminary offering circular supplementing the original prospectus.

But most U.S. investors aren’t supposed to get marketing material for these shares, and so, emblazoned atop each page of the press release — filed for review and dissemination in the public database of the U.S. Securities and Exchange Commission — is the sentence:

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES

As a note at the bottom of the release explains, marketing investments in the U.S. is generally verboten without either registration or an exemption from registration. These shares aren’t registered in the U.S., and “will not be registered under the Securities Act and AIA does not intend to make a public offer of its securities in the United States.” Ergo, for the most part, AIG won’t be marketing them here. An extensive disclaimer atop the offering circular makes essentially the same point.

Of course, filing the paperwork with the SEC isn’t the same as offering the securities for sale in the U.S., and AIG makes it clear at the top of the offering circular that it’s marketing the securities to “qualified institutional buyers” under the 1933, and/or in offshore transactions meeting the criteria in Regulation S.

Everyone else, move along: Nothing to see.

Image source: Marcus Q via Flickr

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