Who is an owner? What's your story?

[ELA]

Originally Posted by phystech

I wonder how they get around SEC regulations regarding their offerings?

Given they aren't just marketing something to a few of their closest friends, in essence, they are offering an investment to the whole world via the web, print and TV. SEC regs have to come into play there somewhere.

I thought about going global a few years ago and actually printed up about 10,000 fliers which I distributed at Pimlico on Black Eyed Susan Day and Preakness Day. Other than the fact that out of those 10,000 distributed, I got three emails and 5 hits on a web page I had set up, I backed off because my fears were raised about SEC intervention once I found out that the first partnership I was in had been investigated and fined by the AZ SEC.

Given that so many of the partnerships out there charge a management fee, I guess I was a real idiot - I never charged my partners a dime in management fees. I bought my shares in each horse just like everyone else did and made my money off my share of ownership, just like the rest did. We all made the same or lost the same, based on percentage of ownership.

Great question -- and, I had often wondered about the "securities" aspect of this. Being in the financial services industry, I am more than well aware of the NASD, SEC, securites, etc. element that this entire environment seems to either encroach or come very close to.

One person told me that technically they aren't "soliciting" and that's how they avoid registering, falling under securites guidelines, etc. I am not sure if that's true or if that's the case here. However, often there is disclaimer language that the advertisement, commercial, etc. is not a solicitation. Again, I don't know if that avoids any securites regulation or guidelines.

Another partnership company CEO told me that he cannot solicit people and that people must put something in writing saying they are requesting information and are interested, etc. That was quite some time ago so I don't know if that standard still exists.

Usually, when it comes to securities offerings and registrations, there are several benchmarks that must be met -- or avoided if you look at this from the opposite perspective, LOL.

Eric

[philcski]

Actually most of them put the standard securities disclaimer language ("this is not an offer to sell securities, past performance does not indicate future success, financial instruments run the risk of significant loss", etc.) into their advertisements and offerings.