Syndicators looking to raise capital from investors in Oregon should be aware of Oregon’s Blue Sky Laws. These laws regulate the securities industry within the state and understanding the basics of Oregon’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 Oregon’s Blue Sky Rules apply.
What if I Need to Notify Oregon about my Regulation D Syndication?
Filing fee – Fixed
New notice – $250
Late fee for late filings – None
What are Oregon’s Blue Sky Laws?
OR ST § 59.025 Exempt securities
OR ST § 59.045 Denial, withdrawal or conditions to exemptions; liability on withdrawal
OR ST § 59.049 Exemption of federal covered securities from registration
OR ST § 59.055 Offer and sale of securities; conditions
OR ST § 59.145 Notice filing, registration or license not a guarantee
OR ST § 59.275 Burden of proof
What are Oregon’s securities laws exemptions?
Governmental entities; certain foreign governmental entities; Financial institutions: banks, savings and loan, land banks, farm loan associations, trust companies and credit unions; Public utility commission regulated security; Cooperatives: agricultural cooperative corporation, irrigation association, fishing cooperative corporations, and consumer cooperatives; Listed stock exchange securities etc.; Security with approved rating; Non-profit persons; Commercial paper; Employee benefit plan; Federal covered securities.
Frequently Asked Questions
Do I need an attorney from Oregon then to put together an offering?
That depends. If the offering you are putting together is under Regulation D and not one of the Oregon-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, Oregon, that was going to be offered in different states, and you didn’t need counsel on questions related to Oregon 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 Oregon 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 Salem, Oregon, all of the investors were from Oregon, and you wanted to use one of Oregon’s Blue Sky Laws above as an exception to registration, then you would need to work with someone licensed in Oregon.
Is it ok if the real estate syndication attorney, licensed outside of Oregon, looks over my purchase contract?
They can look, but they can’t give you advice as it pertains to Oregon. 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 Eugene, Oregon, 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.
Tilden Moschetti, Esq., is a highly sought-after syndication attorney with nearly two decades of experience. His clientele ranges from real estate developers and startups to established businesses and private equity funds. Tilden’s expertise in syndication law comes not only from his knowledge of syndication and securities law but from real, hands-on experience as an active syndicator himself in every real estate product type and nearly all markets in the US. His knowledge and experience set him apart and established him as the Reg D legal services leader.