In 2016, we started a small friends and family pooled investment fund, with the intention of funding our land development projects. We retained a local law firm to assist in the filings and setup of the fund, as well as provide guidance for legal compliance.

During this time—unbeknownst to us—the law firm representing us was being investigated by the SEC. As a result, we believe the SEC’s investigation in Lake Oswego expanded to include our fund by way of association.

The SEC’s statutes and regulations were frequently updated during this time. One of the changes allowed for general solicitation and marketing disclosures. We found out that our previous law firm did not file the correct forms required under these new guidelines. We were only made aware after being notified by the SEC.

At that point, we were then scrutinized for all our disclosures. There were two main points of contention: the verbiage used when defining my personal and previous experience, and the
inclusion of projects completed prior to when the fund had started; our intent was to both demonstrate our capability and show our historical returns. This, however, was not allowed, according to how the fund had originally been filed with the SEC.

After years of SEC review, we found new and reliable legal representation, and based on their advice, we decided to settle with the SEC. This was purely to avoid any delay in redemptions for our investors, and potentially being tied up in a lengthy and costly legal battle. Had we been provided the appropriate legal advice and representation during the fund’s creation, these filing errors and marketing claims would never have been made. 

Our sole priority throughout the investigation was to protect the fund investors, who were limited to close friends and family. After settlement, we successfully closed out the fund: all redemptions were made, and all of the deals closed successfully.