b'Trust Deed v. Fund Investment continued from page 32feasible for both the Issuer and investors.have certain remedies under the securitiesConclusion:The most popular and cost efficient rulelaws, including, allegations of violation of that an Issuer generally relies on is RuleRule 10b-5.The SEC, as a matter of publicAs discussed above, there are various 506 of Regulation D.From securities lawspolicy, disallows Fund managers fromsecurities laws implications when making perspective, the reason a fund shouldcircumventing Rule 10b-5 violations.Direct and/or Indirect Investments, and be created is two-foldit creates ansecurities laws pertaining to exemptions exemption from registration with theWhat Happens when the Issuervary widely.In certain instances, securities SEC, and it preempts state laws, in thatViolates Securities Laws?laws may not apply, as control appears the fund manager is not concerned aboutto one of the main aspects in determining state regulations.In the event an investorPenalties for violation of securities lawswhether an investment is a security.When resides in a different state than the Issuer,are generally draconian. Penalties aremaking these types of investments, issuers the manager need not be concerned aboutharsh for the Issuers and managers. Fraudand investors alike should be cognizant out-of-state securities laws compliance.(whether intentional or negligent, orof the securities implications, and consult whether malicious or not) are at the cruxwith securities counsel for assistance.Fund investments also have practicalof these penalties. As a historical context, implications. First, investor funds are morethe penalties, in one form or another, centralized. They are all in one account,originated from the 1929 stock marketTae Kim is a Corporate and Securities and deployment of capital becomescrash, which led to severe economicAttorney at Geraci LLP whose practice much easier and more efficient to fundconsequences for the United States.involves advising clients on securities loans.The Fund becomes the lender ofDuring this time, fraudulent practices werecompliance in private and public offerings, record, and the control of the loans andrampant, and the SEC (and state regulators)fund designing, and preparing offering the underlying property is all within thetook on the role of safeguarding investordocuments. Tae and the Corporate and control of the Fund and its manager.Themoney.An exemption rule violation maySecurities team work closely with clients investors become passive because ofrequire the issuer to register with the SECto establish mortgage funds, real estate limited control on the governance ofor a state government agency. Rescissionacquisition funds, syndications, real estate the Fund, as reflected in the governanceof investor money and/or fines may alsoinvestment trusts (REITs), and Qualified documents.On the other hand, investorsbe required.Opportunity Funds.Points of InterestFall 2019Page 33'