Doug Cornelius on compliance for private equity real estate
If the investment is a “security”, you have to comply with the Securities and Exchange Commission regulations. The seminal case is Howey, where a sponsor was selling interests in an orange grove in Florida. The sponsor was not just selling the small land parcels with orange trees on them, but also his management, harvesting and…
The big challenge with crypto is how it fits into regulatory schemes that were drafted almost a century a go. Add in the politically driven split between the regulation of commodities by the CFTC and the regulation of securities by the SEC and you get a mess. Slap in the variable structures used by crypto…
Of course the lawyerly answer is: “maybe.” Ronald Duane Dunham challenged his criminal conviction for securities fraud, arguing that the Cherokee Village lots he sold did not qualify as securities under the California Corporation Code. Mr. Dunham got in this position by persuading a number of elderly victims to invest over a million dollars with…
To show the markets that the Securities and Exchange Commission is not just about slapping around wrong-doers, but also trying to help people navigate the securities laws, the SEC’s FinHub published a framework for analyzing whether a digital asset is a security. The framework is not intended to be an exhaustive overview of the law; rather,…
Earlier this week, a federal judge denied a claim that a cryptocurrency is not a security under the federal securities law. The judge didn’t say that it was a security. Instead, he ruled that a reasonable jury could conclude that the cryptocurrency is a security. This ruling comes from the SEC enforcement action against RECoin,…
Initial coin offerings have been a new wave of financing.. and scams. One offering that you should look at for some lessons about coin offerings is the soon to be released Howey Coin. HoweyCoins are the cryptocurrency for the travel industry. According to the white paper, HoweyCoins partner agreements lock in an average initial discount…
TIC refers to Tenancy in Common, not the blood-sucking insect. A TIC is a completely legal way of owning real estate that has been around for hundreds of years. When one of the parties owning real estate dies, that ownership interest passes to that owner’s heirs. The alternative is joint tenancy, in which case when…
Regulators have been trying to figure out what to do with the new currencies coming to the marketplace. Bitcoin was the vanguard, bringing its blockchain technology into the public’s view. The Securities and Exchange Commission has issued a Report of Investigation that provides some insight into when these currencies and their rollouts are going to violate securities…
The Securities and Exchange Commission brought an enforcement action against Jeffory D. Shields, GeoDynamics, Inc., and several other business entities affiliated with Mr. Shields, alleging securities fraud. The businesses are oil and gas exploration and drilling ventures and Mr. Shields, as managing partner of GeoDynamics, marketed the interests Joint Venture Agreements. The district court granted…
Fee simple ownership of the “bricks and mortar” of real estate is not a security. “The offer of real estate as such, without any collateral arrangements with the seller or others, does not involve the offer of a security.” As you move further away from that model, you move closer and closer to the ownership…