Doug Cornelius on compliance for private equity real estate
San Diego-based ANI Development LLC, its principal, Gina Champion-Cain, raised hundreds of millions of dollars from investors to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. The SEC alleges, the investment opportunities were shams and diverted directed significant amounts of investor funds to other uses. Under California state law, liquor license … Continue reading “Are Liquor Licenses Securities?”
I saw the recent case against Landon M. Smith for operating a real estate offering fraud and Ponzi scheme and jumped in to see if I could learn anything from the case. According to the SEC complaint, Smith held himself out as a “property wholesaler” who could earn significant returns on any funds invested with … Continue reading “Is a Note from a Real Estate Wholesale a Security?”
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 … Continue reading “Can a Real Estate Lot Be a Security?”
These are some of the compliance-related stories that recently caught my attention. Reasonableness Pants Commissioner Hester M. Peirce A strong enforcement program requires us—to draw from the admonition a judge recently gave to us in a matter before her—to “put on [our] reasonableness pants.” The SEC ought always to wear reasonableness pants, and I would like to … Continue reading “Compliance Bricks and Mortar for May 17”
As cryptocurrency issuance declines, the Securities and Exchange Commission is continuing to clean out the fraud, mis-steps, and foolishness of coin promoters. These actions have carried over to the services and investment managers involved in coin offerings. Usman Majeed wanted to make his money by running a fund that invests in cryptocurrency. He ran into … Continue reading “Pre-existing, Substantive Relationships and General Solicitation”
These are a few of the compliance related stories that recently caught my attention. Why The SEC Shutdown Must End (Now) by John Reed Stark It is not surprising that the SEC has only filed one civil action in federal court since the shutdown began, which was a parallel action brought alongside the U.S. Attorney’s Office for … Continue reading “Compliance Bricks and Mortar”
The Securities and Exchange Commission says “no.” My first question is what is a mutual water water company? From my view here in New England water comes from the municipality or your own well. California is big and creating whole new communities. In this case, the Tesoro Viejo Master Mutual Water Company is being formed … Continue reading “Is Stock in a Mutual Water Company a Security?”
Todd Hitt wanted to be big-time, but his lies have landed him in handcuffs. He claimed that the firm he founded, Kiddar Capital, had over $1.4 billion in assets under management, offices in Falls Church, Houston, Palm Springs, and London, and was put $6 million of the firm’s money into developing a Herndon, Virginia building … Continue reading “The One with the New Commuter Rail Station”
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, … Continue reading “Yes, A Cryptocurrency Can Be a Security”
In a completely unsurprising statement, a high-ranking official at the Securities and Exchange Commission said that Bitcoins are not securities. William Hinman, Director, Division of Corporation Finance at the SEC, gave detailed speech on cryptocurrency. When we see that kind of economic transaction, it is easy to apply the Supreme Court’s “investment contract” test first … Continue reading “Bitcoins Are Not Securities”
