http://www.ericperkinslaw.com/index.php en eric@ericperkinslaw.com Copyright 2010 2010-08-25T19:30:07+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/financial_reform_law_tweaks_reg._d_definition_of_accredited_investor/ http://www.ericperkinslaw.com/index.php/whats-new/post/financial_reform_law_tweaks_reg._d_definition_of_accredited_investor/ The Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173) has been passed by the United States Congress and sent to the President for his signature.  Once signed into law, Regulation D sponsors and syndicators must take immediate action to update their offering documents to comply with the law's revision to the definition of "Accredited Investor," the target audience for most Regulation D private placements. In short, the revised definition of "Accredited Investor" now excludes the value of an individual's primary residence from the calculation of the $1,000,000 net worth test under Rule 501(a)(5). According to reports from the Real Estate Securities Investment Association, the SEC has indicated that this change will go into effect immediately upon President Obama’s signature of the bill. Therefore, Regulation D sponsors must take immediate action to update their offering documents, investor questionnaires, and subscription agreements to incorporate this new information.  This would apply to offerings currently in progress as well those planned for future release. Another change to Regulation D resulting from the financial reform law is to incorporate certain "bad boy" disqualifiers preventing certain issuers with a record of judgments against them from relying on Regulation D exemptions for their capital raising efforts.   Real Estate Syndications 2010-07-21T13:06:01+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/proposed_changes_to_reg._d_definition_of_accredited_investor/ http://www.ericperkinslaw.com/index.php/whats-new/post/proposed_changes_to_reg._d_definition_of_accredited_investor/ It seemed inevitable that the recent push for financial reform would reach Regulation D, the big question was how much of an impact would there be once the dust settled. At the moment, it appears Regulation D will remain intact in all material respects, with only modest revisions to the definition of "accredited investor" (interestingly, the SEC had proposed somewhat similar revisions a few years ago, but never promulgated them in final form). Here's a summary of what the latest proposed amendment does, with respect to the Reg D accredited investor definition: mandates an immediate change to the Rule 501(a) accredited investor definition for individual investors, to exclude the value of one's principal residence from the net worth threshold of $1 million; contemplates (but does not require) that the SEC may review the definition as a whole (including, presumably, the annual income requirements to adjust for inflation); and requires that there be no adjustments to any accredited investor definition that raise the net worth threshold in excess $1 million, less the value of one's principal residence, for a period of four years. Stay tuned to see what the final language in the bill looks like.  Real Estate Syndications 2010-06-05T01:17:53+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_regulation_d_compliance_article_published_in_trade_association_maga/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_regulation_d_compliance_article_published_in_trade_association_maga/ Eric Perkins' recent article, "Update on the New Electronic SEC Form D and State Blue Sky Compliance," appears in the current issue of "FYI," the flagship periodical of the Real Estate Investment Securities Association.  For more information about REISA, visit www.reisa.org. Real Estate Syndications 2009-08-03T20:48:52+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_article_to_appear_in_national_publication/ http://www.ericperkinslaw.com/index.php/whats-new/post/perkins_article_to_appear_in_national_publication/ Eric Perkins' article on tips for becoming a successful sponsor of securitized tenant-in-common programs is scheduled to appear in the September issue of "The Practical Real Estate Lawyer" published by the American Law Institute/American Bar Association.  For more information, visit www.ali-aba.org. Real Estate Syndications 2009-07-20T01:47:18+00:00 http://www.ericperkinslaw.com/index.php/whats-new/post/virginia_blue_sky_securities_compliance_update_for_regulation_d_rule_506_pr/ http://www.ericperkinslaw.com/index.php/whats-new/post/virginia_blue_sky_securities_compliance_update_for_regulation_d_rule_506_pr/ Real estate sponsors, promoters, and other issuers of securities in Regulation D/Rule 506 private offerings should take note of two modest rule changes under the Virginia Securities Act that went into effect July 1, 2009: 1.  Form U-2 (Consent to Service of Process) is no longer required.  Because the new version of SEC Form D incorporates the same substantive elements of Form U-2, Virginia has now joined other states in dropping the Form U-2 filing requirement in connection with Rule 506 offerings. 2.  New language clarifies that the version of SEC Form D to be filed with the Virginia Division of Securities and Retail Franchising is the new version of Form D adopted by the SEC in September 2008.  Further, the document to file in Virginia is the same one “as filed” with the SEC (i.e., Form D filings with the SEC and the Commonwealth of Virginia should provide the same information). While the North American Securities Administrators Association is working on a “one stop” Form D filing platform that will allow Regulation D issuers to submit state notice filings electronically through one Web site, that is likely a long-term project.  Until then, while Form Ds must be filed with the SEC electronically via EDGAR,  state blue sky notice filings must continue to be filed by mail.  Regulation D issuers would be smart not to underestimate the importance of blue sky compliance as even a seemingly minor, technical violation of the applicable securities laws could have disastrous results.   Real Estate Syndications 2009-07-11T02:09:21+00:00