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

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indicator finding investors. Now
when it comes to finding

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

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

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

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

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

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

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we're going to go through today.

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

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the Moschetti syndication Law
Group. We're talking about

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general solicitation today,
we're actually going to narrow

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

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

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

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

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look at the rule itself, of what
constitutes a general

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

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

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it general solicitation there,
they call it the manner of

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offering the limitation on the
manner of offering what helps

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

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

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

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

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

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

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

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

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

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

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

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advertisement, Article notice or
communication published in any

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newspaper, magazine, or similar
media or broadcast over

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

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

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

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

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

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

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

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

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

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

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

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

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Rule 502c1. However, the
difference is the substantive

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ness of that relationship with
those people that you have on

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

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

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

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

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

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

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friends of friends and friends
of friends or friends or

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

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

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

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

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

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

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

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internal network. So it is
taking advantage of that similar

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

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

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

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

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invest stick into XYZ and not
make anything about investors or

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

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

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

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

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conversations, not pitch them
immediately unless it happens to

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be somebody you actually already
have that substantive

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relationship with. But then you
can take that conversation

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

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

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

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

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

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

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

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

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

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you can risk being considered an
illegal activity. Exemptions

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

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

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

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takeaway. Social media
advertising is a major concern

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

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

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

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

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

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

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

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

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

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

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

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syndication attorney with
Moschetti syndication Law Group.

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

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providing you the documents and
the assistance you need to make

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yourself successful, we would be
happy to help you