Syndicators looking to raise capital from investors in Maine should be aware of Maine’s Blue Sky Laws. These laws regulate the securities industry within the state and understanding the basics of Maine‘s blue sky laws will help you make smart business decisions about how you put together an offer and protect yourself from potential legal trouble.

 

What are Blue Sky Laws in General? 

The purpose of securities laws is to protect investors. There are two levels of regulatory agencies that provide that protection: the Securities and Exchange Commission (the SEC) and each state’s security regulation agency.

Federal law has severely restricted the states’ abilities to review or restrict sales of most securities when offered through a Federal regulation (such as syndication of a Reg D offering). The states do, however, often require a notice be filed with them along with the appropriate fee, conduct investigations, and bring fraud actions if necessary in order to protect those domiciled in their states.

When everything takes place within the state, then Maine’s Blue Sky Rules apply. 

 

What if I Need to Notify Maine about my Regulation D Syndication?

Here are the basic facts you need to know about giving notice to Maine about your Reg D Rule 506b or 506c offer:

Filing fee – 

New notice – 

Late fee for late filings – 

 

What are Maine’s Blue Sky Laws?

  1. ME ST T. 32 § 16201 Exempt securities
  2. ME ST T. 32 § 16203 Additional exemptions and waivers
  3. ME ST T. 32 § 16204 Denial, suspension, revocation, condition or limitation of exemptions
  4. ME ST T. 32 § 16301 Securities registration requirement
  5. ME ST T. 32 § 16503 Evidentiary burden
  6. ME ST T. 32 § 16506 Misrepresentations concerning licensing, registration or exemption
  7. ME ST T. 32 § 16608 Uniformity and cooperation with other agencies

 

What are Maine’s securities laws exemptions?

Governmental entities; certain foreign governmental entities; Financial institutions: depository and banking institutions; Non-profit membership cooperatives; Other entities: railroads, common carriers, public utilities, public utility holding companies and insurance companies; Equipment trust certificates; Listed security market securities and clearing agency options etc.; Non-profit persons etc.

 

Frequently Asked Questions

Do I need an attorney from Maine then to put together an offering?

That depends. If the offering you are putting together is under Regulation D and not one of the Maine specific Blue Sky Laws (as discussed above), then probably not. 

For example, if you needed a real estate syndication attorney to put together a private placement memorandum for a multifamily deal in Portland, Maine, that was going to be offered in different states, and you didn’t need counsel on questions related to Maine laws, then chances are a licensed syndication lawyer would be able to help. They could even put together the entity for you and write the operating agreement, they just couldn’t provide you counsel on the specific laws of Maine and how they may or may not pertain to your offer.

However, if you were putting together a private placement memorandum for a development project in Lewiston, Maine, all of the investors were from Maine, and you wanted to use one of Maine’s Blue Sky Laws above as an exception to registration, then you would need to work with someone licensed in Maine.

 

Is it ok if the real estate syndication attorney, licensed outside of Maine, looks over my purchase contract?

They can look, but they can’t give you advice as it pertains to Maine. For example, Tilden Moschetti, Esq, syndication attorney for the Moschetti Syndication Law Group, will look, if asked, about the contract underlying your purchase contract in Bangor, Maine, but makes it clear that he can give business consulting advice (discussion on price and broad deal points like the length of time until closing), but cannot speak to any specific term as he is not licensed there.