Tilden Moschetti: Regulation D
rule 506b and 506c involves us

indicator finding investors. Now
when it comes to finding

investors, either we're pulling
them from our own internal

network, or we're finding them
outside. Now one of the ways we

can do that is to make sure that
those people within our network

and those people outside hear
our message. And we do that

through a solicitation. But what
is a general solicitation? And

what does that mean in this
modern day and age? That's what

we're going to go through today.

My name is Tilden Moschetti. I
am a syndication attorney with

the Moschetti syndication Law
Group. We're talking about

general solicitation today,
we're actually going to narrow

it down a little bit more,
because we have one question

that comes up in my office all
the time. And that is, how

social media could possibly fit
into this context. Now, to put

this into its proper frame, I
think it's important for us to

look at the rule itself, of what
constitutes a general

solicitation. Now in the code
itself, it's under Reg D rule

502, where they actually
describe it, and they don't call

it general solicitation there,
they call it the manner of

offering the limitation on the
manner of offering what helps

describe it. And that limitation
applies directly to rule 506b.

Because remember, under 506c, we
can make a general solicitation,

well, you can put a billboard up
on Main Street, we can do

whatever, but 506b, we have a
limitation on offerings. So what

exactly does the SEC tell us
what that means? What is a

general solicitation? Well,
here's what you can't do. First

there is, what we can't do is we
can't have a seminar where the

whole purpose of it is just to
market the offer. So that's

502c(2) that describes it. But
Rule 502c(1) one actually

describes a little bit better
and starts to get on what we're

talking about today. And so it
says, And they meet any

advertisement, Article notice or
communication published in any

newspaper, magazine, or similar
media or broadcast over

television or radio? Oh my
goodness, do these people live

under a bridge? Or what? Because
that needs to be severely

upgraded. Newspapers? What are
those magazines? I've heard of

them? They mean, like those
digital magazines talking about?

What about social media? And
that's a question that I get all

the time. So the argument could
be made, and I think not

correctly. And we'll go through
why in a minute. That? Well,

when I add when I post something
on Facebook, I'm posting just to

my network itself. So those
people who already know me,

right, so those people who
already know me, they can know

that I'm doing it, and it's not
a general solicitation, it

doesn't really fit in to what
they were talking about under

Rule 502c1. However, the
difference is the substantive

ness of that relationship with
those people that you have on

Facebook. I mean, my Facebook
account has many, many

followers. And the reality is, I
probably know 100 of them.

There's probably 400, 500, 600
people who have liked my page,

and I've accepted their friend
requests. And I don't actually

know them. Now on LinkedIn,
that's also very common. So

these are be friends, friends of
friends, friends, of friends, of

friends of friends and friends
of friends or friends or

friends, or people who just sent
me advertising and we're in

similar industries. And so I add
them. That is the case and the

SEC knows it, and the courts
know it. So when it comes to

actually making a solicitation,
if I were to post about my Rule

506b offering, hey, come look at
this that I'm offering. Come

invest with me now. I'm making a
general solicitation because

it's going out to people who
really aren't part of my

internal network. So it is
taking advantage of that similar

media broadcast, right. So I'm
broadcasting it out over the

wide spectrum. So social media
itself needs to be very careful

when you've got a 506b offering.
Now, certainly I could probably

say something like, Hey, I'm a
hey, I'm going I am going to be

invest stick into XYZ and not
make anything about investors or

come invest with me or anything
else. Or, Hey, I've been doing a

lot of work in real estate or
securities or private equity or

crypto mining or whatever it is
that you're doing. I'd love to

talk to all of you about it. And
then as part of those

conversations, not pitch them
immediately unless it happens to

be somebody you actually already
have that substantive

relationship with. But then you
can take that conversation

offline, you have a conversation
in general about those, you wait

a period of time and you
reintroduce it, we have other

videos that talk about exactly
that process. And you can find

them on my channel. Where the
key takeaway here is this when

you're selling securities, which
involves the sale of stocks,

bonds, mutual funds, real
estate, and the sort of interest

where somebody has a passive
role, you as a syndicator must

comply with the securities law,
obviously. Now, syndicators can

choose to register with the SEC,
or you can find an exemption, or

you can risk being considered an
illegal activity. Exemptions

like Reg D Rule 506b, and 506c,
are very popular and useful. And

it's what my law firm
specializes in. And they provide

a certainty and save time and
money. But here's the main key

takeaway. Social media
advertising is a major concern

for you. It can impact the
exemption 's use, and it can

require an enormous amount of
penalties, which you don't want

to hit if it's been used. So
treat social media as if it is

really media, the emphasis in
that term, as it would be looked

at by the SEC or court is media
which means general solicitation

almost always. So use it with
caution. If you've got a 506b

offering, do not talk about your
your offering in any sort of

specific terms or that there's
even a possibility of investing

with you, because that will be
eventually used against you,

either in this offering or in
some offering that you make down

the road. My name is Tilden
Moschetti. I am a real estate

syndication attorney with
Moschetti syndication Law Group.

And if we can help you do your
own syndication with by

providing you the documents and
the assistance you need to make

yourself successful, we would be
happy to help you