Syndicators looking to raise capital from investors in Massachusetts should be aware of the Massachusetts’s Blue Sky Laws. These laws regulate the securities industry within the state and understanding the basics of Massachusetts’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 Massachusetts’s Blue Sky Rules apply. 


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

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

Filing fee – Variable

New notice – $250 – $750

Late fee for late filings – None


What are Massachusetts’s Blue Sky Laws?

MA ST 29 § 49C College savings programs; issuance and sale of bonds; powers and duties of state treasurer

MA ST 110A § 301 Registration Requirement

MA ST 110A § 402 Exemptions

MA ST 110A § 405 Unlawful Representations Concerning Registration or Exemption


What are Massachusetts’s securities laws exemptions?

Governmental entities; certain foreign governments including Canada; Financial institutions: banks, savings institutions, trust companies, savings and loan, building and loan, small loan corporations, credit unions, industrial loan associations etc.; Cooperative corporations; Other entities: railroads, common carriers, public utilities, holding companies, and insurance companies; Listed stock exchange securities; Non-profit persons; Current transaction commercial paper; Employee benefit plan


What are Massachusetts’s procedures for securities law exemptions? 

Applicable to: employee benefit plan; Procedure includes: written notice of plan


Frequently Asked Questions

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

That depends. If the offering you are putting together is under Regulation D and not one of the Massachusetts 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 Boston, Massachusetts, that was going to be offered in different states, and you didn’t need counsel on questions related to Massachusetts 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 Massachusetts 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 Worcester, Massachusetts, all of the investors were from Massachusetts, and you wanted to use one of Massachusetts’s Blue Sky Laws above as an exception to registration, then you would need to work with someone licensed in Massachusetts.


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

They can look, but they can’t give you advice as it pertains to Massachusetts. 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 Springfield, Massachusetts, 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.