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

 

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

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

Filing fee – Fixed

New notice – $200

Late fee for late filings – $200 > 15 days after the date of first sale

 

What are Nebraska’s Blue Sky Laws?

NE ST § 8-1110 Securities exempt from registration.

NE ST § 8-1114 Unlawful representation concerning merits of registration or exemption

NE ST § 8-1121 Exemption or exception; burden of proof

NE ST § 8-1122.01 Federal limits rejected.

NE ST § 21-2116 Shares; exempt from registration.

NE ST § 23-35,116 Hospital authority; powers; supplemental to other laws; bonds

 

What are Nebraska’s securities laws exemptions?

Nebraska governmental entities; certain foreign governments including Canada; Financial institutions: international banks and credit unions etc.; Other entities: railroads, common carriers, public utilities and holding companies; Listed stock exchange securities etc.; Non-profit persons; Securities meeting certain conditions

 

What are Nebraska’s procedures for securities law exemptions? 

Applicable to: listed stock exchange securities etc.; Procedure may include: filing notice and $200 filing fee

 

Frequently Asked Questions

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

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

 

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

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