Legal Question in Securities Law in California

Investment Fund
If someone were to raise an investment fund of $500K to be used for small real estate investments does this fund need to be regulated by the SEC and do the investors need to fit the criteria of ''qualified investors?'' I know that is the case for large VC or PE funds but I am pretty sure something this small does not fit into the same regulations. Please advice. Thank you.

Asked on 1/29/09, 9:21 pm

4 Answers from Attorneys

Jillian Sidoti The Law Office of Jillian Sidoti

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Re: Investment Fund

Hi,

No matter what you do, you need to, at minimum, file the form D under Regulation D of the Securities Act of 1933 if you even have just one investor outside of the state. If you are not using accredited investors only, you also need to provide the proper disclosures and documentation. Then, you must also do what's referred to as "blue sky" the sale with each state in which you sell securities.

I hope this helps.

Answered on 1/29/09, 9:27 pm

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Daniel Bakondi The Law Office of Daniel Bakondi

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Re: Investment Fund

it is an investment contract and therefore a security and you have to comply with state securities laws, including either registration or filing the proper exemptions. if you are looking to hire an attorney for this, let me know.

Best,

Daniel Bakondi, Esq.

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Answered on 1/29/09, 9:58 pm

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