Lines of Credit, Credit Restoration, Derogatory Removal, Large Project, Church Loans, SBA, Traditional Commercial, Comments 20100113

Greetings from the beautiful San Francisco Bay Area where temperatures are in the low 60’s.

On behalf of Bonnie, Jenny & Brian, Katie and Mike our family wishes you a successful and prosperous New Year. If we can be of service in any way please call or write.

News Flash!!!

Dale and I are buying homes in Contra Costa and Solano County California. We buy houses “AS IS” for a fair price on the date of your choice.

For those who may be interested in obtaining an above average rate of return on their funds backed by California Real Estate we are accepting funds from investors.

We also provide turn-key deals for investors with a guaranteed minimum 15% equity position and cash flow of $150 a month.

Three different opportunities for you and those whom you choose to refer.

This came in from Peter in San Diego:

Brent………..It was nice meeting you Sunday afternoon.  I hope something will work out for you, your company and Joe Tufo.  I have known Joe Tufo and his company for nearly 4 years, and know him to be able to do what he says he can do, and more importantly to be an honest and upright guy.  Cash Flow Specialists, have developed their own market niche.

Please feel free to contact Joe directly.  I am forwarding his response to my referring email………….Good fortune in going forward, Peter

Marty is an attorney who is a referral partner in Las Vegas. This is an email that I sent him Saturday January 9th:

It’s interesting that when I need an attorney that I’m expected to pay a sizeable retainer yet when an applicant wants to tap my 33 years of financial services experience to fund their project that I’m expected to work for free and yet they want a non-exclusive finders agreement.

I’m not in the fee business or the work for free business. I believe in being fair. I wish you the best of success in obtaining funding.

I believe in playing fair and I make that clear on the landing pages of and

There are too many time wasters who think nothing of pitting 10 funding sources against each other. I refuse to participate in that nonsense.

We have viable funding sources that close transactions. When you get SERIOUS then visit and and learn about us.

The Working Capital Fast website is approx. 600 pages of in depth research and analysis with 19 categories of products and services. The Cash Flow Specialists corporate website has approximately 1800 pages of content including the newsletter archives.

I work 54 hours a week: 7AM to 5PM M-F Pacific and 8AM to noon Saturdays now that the holidays are over. I’m not a miracle worker. We’ve funded hundreds of businesses since July 1, 1999.

I encourage you to read our newsletters, learn how we do business and get plugged in.

This came in Saturday January 9th:

On Sat, Jan 9, 2010 at 4:54 AM, Kurt H wrote:

I was curious as to how you got my contact information (email).  Not upset or anything, but just curious.

I actually maybe interested in looking into your services to enhance my current line of credit.

Kurt H
Agency Manager

4938 have opted into our newsletter list, 1800 have done business with us and I know personally. It’s a mystery as to how the other 3138 discovered us. There’s an option to opt out at the bottom of each newsletter.

You’ll find credit enhancement services mentioned on our websites. Thanks for writing.

This came in Saturday January 9th from a Proof of Funds Provider:

  • Accounts available from $100K to $5 billion
  • Money Market funds seasoned for six (6) months
  • No Credit Check or Financial Statements Required
  • Funds in an account under client’s name and signature
  • Rates starting as low as 1.0% per month

Proof of Funds Uses

  • Net Worth Requirements
  • Liquidity Requirements
  • Show of Account Funds
  • Bonding Requirements
  • Blocked Funds for Investments

Proof of Funds Account Parameters

  • 30 & 60 day accounts, with discounts provided for renewal terms
  • Standard bank Verification of Deposit provided for all accounts
  • Bank accounts opened and confirmed in writing by bank officers
  • SWIFT MT799/760 confirmation option available in Offshore Banks
  • Brokers welcome and protected

Our agency provides investment capital for Proof of Funds/Verification of Deposit (VOD) uses on a short or long-term basis. The funds from our “investor pool” are utilized to provision POF accounts at a predetermined fixed return-on-investment so that our client’s will not have to give up any ownership positions in their projects or trades.The VOD account is set-up in the client’s name and they are a signatory on the account. The set-up process is simple and secure, and can be completed in as little as two banking days. We specialize in U.S. money market accounts with six months of seasoning, confirmed through written Verification of Deposit, with an electronic account access option. Other account types are available providing confirmations utilizing SWIFT MT999, SWIFT MT799 and SWIFT MT760 message formats. Rate-of-return requirements vary, dependent upon the amount of funds provided and the verification type needed.

All accounts require full client disclosure and are opened in strict compliance with the provisions of the International Money Laundering Regulations and the US Patriot Act.

This came in from Fred a Proof of Funds provider Jamuary 13th:

What is the Funds amount requested?

  • $2±Million -to- $100+Million or more.

What is your transaction?

Funds for any Transaction with a guaranteed exit.

  • Buy-Sell of assets/instruments,
  • Private Placement Program-Investments,
  • Enhancement — Credit/Collateral loans,
  • Escrow — Compensating/other deposits,
  • Project/Business — Debt/Bridge structured financing,
  • SWIFT transactions,
  • Riskless Arbitrage.

What guarantees Exit/Take-out of Funds and Transaction Fees-Costs?

  • What is the transaction-instrument exchanged for the Funds?
  • Who guarantees the exit/cash-out value?

Do you have the Cash to pay Commitment Fee?

Fee is 5±% of Funds amount. (minimum $75-Thousand Cash or as agreed)

  • 5±% Cash; or
  • 1±% cash and balance by your Note and free-clear assets; or
  • 1±% cash and balance by your Note and proof of transaction exit/payment.

These are Fred’s fees. This is my cost. I expect you to be fair with me on a success fee.

Some important website links:

Chris’ Derogatory Removal Service with guaranteed results: this is a video explaining the program in depth this is the program without the commentary

I’ve been blessed by Dale Carnegie’s books, recordings and courses. This is a hyperlink of his Golden Book. 84 clicked and downloaded this gift:

Several have been interested in the application for adding business trade lines to their PAYDEX credit profile. Peter’s service takes about 15 business days. The investment is $4,500.

I’ll be attending Leonard’s  Hard Money Mortgage School in Las Vegas February 25th. If you click on this link {LINK 2} and register and mention TUFO in the coupon code you’ll get two tickets for the price of one.

Our programs are featured in the weekly newsletter and on our websites. The program that works best is Peter and Hector’s Monster Corp:

Not For The Faint of Heart

I have known Hector and Peter for 16 months. They are the best that I have found at funding business people who acquire active corporations that can be funded in three increments:

$500,000 cost $33,000 to their company: $5,000 to Cash Flow Specialists, Inc.

$1,500,000 cost $60,000 to their company: $15,000 to Cash Flow Specialists, Inc.

$2,000,000 cost $75,000 to their company: $20,000 to Cash Flow Specialists, Inc.

You must have a 735 min FICO score, be at least 27 years old, have a debt to high credit under 30%. The process takes 90 to 130 calendar days. They are very detailed. About three weeks into the process they will make a site visit. They will also meet with you at the close.

{LINK 4}

If you have derogatories holding you back:

Business Credit Enhancement Services

If you need credit enhancement services Peter will build a PAYDEX score of 80 with three to four trade lines totaling $40,000 for $4,500. The process takes about 10 business days.

If you need credit enhancement services Peter will build a Experian score of 77  (low to moderate risk) with three to four trade lines totalling $40,000 for $4,500. The process takes about 45 to 60 business days.

In my experience Experian is more widely used West of the Mississippi. Banks will verify D&B-Paydex with Experian.

Once you sign the agreement and wire fees I will release the application to you.

Mark’s program is new for us but they have been in business for 10 years and have funded thousands. One of our referral partners has been doing business with them and claims that they funded 20 of his clients in 2009.

We enforce our 1% commitment fee because of the amount of time that we invest funding people and the difference between a committed client and one who “shops” the marketplace.

I will not submit business without our fee 1% minimum $2,500, maximum $25,000 so if you apply for up to $250,000 our commitment fee paid up front is $2,500. if you apply for $500,000 it’s $5,000, if you apply for $1,000,000 it’s $10,000. If you apply for $2,500,000 or more it’s $25,000.

We are not in the fee business and we’re not in the work for free business.

Michelle called from Columbus Ohio today. She found us on the web. She’s looking to monetize 50 mines. Here is the information in case you know of mines that need funding:



Items needed for JV

  • Reserve statement signed by a qualified geologist
  • Details of the proposed drilling program to upgrade the reserve classification to proven and probable status if applicable
  • Detailed mine plan, signed by a qualified mining engineer
  • An assessment of the environmental impact of the proposed operations
  • Detailed processing plan signed off by an engineer/metallurgist specializing in the appropriate mineral
  • A detailed marketing plan supported by either sufficient market research for agreements with agents/off-take agreements with clients
  • Details of the management team, including CVs indicating the qualifications of the individuals involved
  • A detailed financial model reflecting the mine, processing and marketing plan on a monthly basis for the first three years of operations and annual cash flow for the life of the operations, inclusive of:
    • Major economic assumptions
    • Price assumptions
    • identification of major cost drivers
    • Environmental liability provision
    • Tax calculations, including Secondary Tax on Companies
    • Working capital movements
    • Financing assumptions
  • Strategic plan of the company, including a proposed exit strategy for the Fund and future fund raising ideas
  • Details regarding the corporate structure of the company

    Michelle also asked about Trading Programs:

    Managed Trading and/or Buy-Sell Programs

    Minimum for some Programs —- $100 Million (cash or present value of instruments)

    Minimum for Buy-Sell Programs –  $500 Million (cash or present value of instruments)

    Minimum for Grandmaster Plan –  $5 Billion (cash or T-Notes)


    Funds/Assets can be blocked in Client’s bank (if in acceptable country), or moved into

    newly established account at Program (top 10 European) bank

    Attorney will verify Client’s POF or SKR, via authority

    to verify letter (listing only permissible questions) via call to banker (with

    Depositor on phone call with Attorney)

    Special Programs:

    We only deal with Licensed Traders (some independent platforms and others inside of

    the Trading Bank). All Program Groups are among the largest in the West.

    One Buy-Sell Trader offers 6 week Program (net, net of 10 times investment possible)

    Grandmaster can swap cash for 105% BG, then places cash into SUPERIOR 1 year format


    CAVEAT:  This e-mail is not an offer to buy or sell financial instruments. My sole function’s to

    identify potential Program Participants, and to introduce both sides so they can contract for a Program.


    We have an alliance to forums that have instruments if not issued from the Trust it will be from the Attorney to the Treasury, Landesbank./Clearing/Cutting House and a Private holder of paper (one of the richest men in the world) depending on request and availability.

    Send LOR or LOI and your FPA for now, along with POF and I will get the attorney on the phone with the buyer ASAP.

    No interference- no broker cloak & dagger please.


    Standard, 2 Banker-Signed, SKR Letter from the depository bank: not a free form swift.

    Or you can provide a sanitized Bank Statement or Tear Sheet.

    With Warmest Regards


Our website rankings thanks to each of you: 425,900 Worldwide 75,038 USA 415,518 Worldwide 75,336 USA

Visit and see how your website(s) are doing.

I ran a competitor of ours. He is at 14,156,832 Worldwide. I ran another competitor who is at 15,896,436 Worldwide. We keep moving up because of visits, videos, audio, comments, and content.  Thanks to each of you.

I am a subscriber to Realty Trac:

Record 3,000,000 homes in foreclosure

RealtyTrac, the online marketer of foreclosed homes, reported that one in 45 households — or 2,824,674 properties nationwide — were in default last year. That’s 21% more than in 2008, and more than double 2007’s total.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said RealtyTrac CEO James Saccacio in a prepared statement. However, by all accounts it is still uncertain whether efforts like Obama’s Home Affordable Modification Program have forestalled or just delayed foreclosure.  By early December more than 680,000 borrowers had gotten temporary workouts but only a few thousand had been permanently modified.

“In the long term, a massive supply of delinquent loans continues to loom over the housing market,” said Saccacio. “And many of those delinquencies will end up in the foreclosure process in 2010.”

The four states with the most foreclosure filings — California, Florida, Arizona and Illinois — accounted for a full 50% of the nation’s properties receiving notices.  Nevada recorded the highest rate of foreclosures, at 10%, followed by Arizona, at 6.1%; Florida, 5.9%; and California, 4.75%.  But some states where foreclosure hit hard early are now faring better. Indiana foreclosures fell by 9.9%, Ohio by 10.5% and Rhode Island by 23.6%.

California, by far the most heavily populated in the union, posted the most filings with 632,573, up 20.8% from 2008. Golden State cities have also recorded some of the steepest declines in home prices, with values falling 50% or more in some Central Valley cities.

Unemployment claims up

The Labor Department said in its weekly report that the number of Americans filing for initial unemployment insurance rose more than expected last week.  There were 444,000 initial job claims filed in the week ended Jan. 9, up 11,000 from a revised 433,000 the previous week.  A consensus estimate of economists surveyed by expected new claims to rise to 437,000.

The 4-week moving average of initial claims was 440,750, down 9,000 from the previous week’s revised average of 449,750.  The government also said 4,596,000 people had filed continuing claims in the week ended Jan. 2, the most recent data available. That’s down 211,000 from the preceding week’s revised 4,807,000 claims.

The 4-week moving average for ongoing claims fell by 151,500 to 4,855,000 from the previous week’s revised 5,006,500 but, as always, remember that the decline may just mean more filers are dropping off those rolls into extended benefits.

Unemployment claims in six states dropped more than 1,000 for the week ended Jan. 2, the most recent data available. Claims in Illinois fell the most, by 6,928, which the state said was due to fewer layoffs in construction, trade and manufacturing industries.  A total of 18 states said the claims rose by more than 1,000. Claims in Massachusetts jumped the most, by 1,166, which the state attributed to layoffs in the transportation, warehousing and manufacturing industries. – commercial mortgage defaults dangerous for banks

The anticipated surge in commercial mortgage defaults this year could wipe out profits at a number of U.S. banks, according to a research study published by SMR Research Corporation. However, SMR said this problem is not likely to morph into a true crisis that would endanger U.S. or global financial systems.  The study found highly delinquent commercial mortgages were only 0.1 percent of Citigroup’s assets. JP Morgan Chase also appears to be “walled off” from the dilemma, and exposure at Bank of America is only slightly higher.

At small banks with less than $1 billion of assets, however, commercial mortgages were 32.5 percent of total assets. This level of dependence is six-fold higher than at big banks with $50 billion or more of assets, SMR said.

Highly delinquent commercial mortgages equaled 3 percent or more of 154 bank’s total assets, as of September 30, 2009. SMR said banks earn profits of only about 1 percent of assets in a reasonably good year, so many of these institutions will be hard-pressed to make any money in 2010, and some banks may even become insolvent.

The 90-day-plus delinquency rate on all commercial mortgages, including multi-family apartment building loans and commercial construction loans, increased at a notable rate in 2009. On September 30, it reached 5.59 percent, up from 3.51 percent just six months earlier. In addition, the vacancy rate on apartment buildings reached its highest level since 1965, and vacancy rates were also high at shopping centers and office buildings. According to SMR’s study, the total commercial mortgage loan market was $3.4 trillion at the end of the third quarter in 2009.

Retail sales lame in December

The Commerce Department said total retail sales fell 0.3% to $353 billion last month, compared with November’s upwardly revised 1.8% jump. Economists surveyed by had anticipated that December sales would grow 0.5%.Consumer spending accounts for two-thirds of U.S. economic activity, and related reports such as retail sales are closely watched to determine whether a recovery is underway.  Sales excluding autos and auto parts fell by 0.2% from November and core retail sales, which excludes autos, gasoline and building materials, fell 0.3 percent after rising 0.9 percent in November.  Analysts expected sales ex-autos to jump 0.3%.

Health and personal care stores increased 0.8%. But restaurants and bars fell 0.6%. Electronic and appliance store sales plunged 2.6%.  Also showing declines: building material and garden supplies dealers, down 0.4%; food and beverage stores, down 0.8%; clothing stores, down 0.6%; general merchandise stores, down 0.8%.  Mail order and Internet retailers rose, up 1.4%. Furniture retailers climbed 0.3%. Sporting goods, hobby, book and music stores jumped 1.6%.  Given that the economy was so weak 12 months ago, year-to-year increase was strong. December 2009 retail sales jumped 5.4% compared to the same month in 2008. Stubbornly high unemployment remains the weakest link in the recovery from the worst economic downturn since the 1930s. Job worries are expected to constrain consumer spending, which normally accounts for more than two-thirds of economic activity.

Housing sales up

In the December 2 edition of the Summary of Commentary on Current Economic Conditions, commonly called the Beige Book, eight Federal Reserve Districts reported an economic uptick.  In fact, all but two Fed districts reported increased activity or improved conditions, with Philadelphia and Richmond seeing mixed results.  At the end of the year, home sales increased in every district but San Francisco, where activity was steady and Kansas City, which experienced a decline. Lower-priced homes typically purchased by first-time homebuyers outpaced sales of higher-priced homes.

The districts project the extension and expansion of the homebuyer tax credit could give an added impetus to the expected seasonal sales upturn this spring.  Despite the improved activity, prices have remained at their low levels. Boston, Philadelphia, and Cleveland experienced price declines, Richmond remained steady, while Dallas reporting some “firming” in prices. New residential construction activity is at low levels in most districts, but Chicago and Minneapolis are exceptions to this trend.  Rising vacancy rates and falling rents both impact the weakness in commercial real estate. Landlords are focusing on tenant retention, negotiating lease extensions at low rents and with favorable allowances.  Loan demand continues to decline or remain weak and credit quality continues to deteriorate, most districts said. The exception to this is residential mortgages, which is experiencing a steady demand.

Fannie Mae Launches Special Approval Designation

Fannie Mae announced that it’s going to take a look at hundreds of condominium projects in Florida that may not currently meet Fannie Mae’s standard eligibility criteria to see if it can allow additional projects to become Fannie Mae-eligible through a new “Special Approval” designation.  Projects deemed to be sufficiently stable following the closer examination are granted a Special Approval designation, meaning lenders can originate and deliver mortgage loans secured by units in these projects to Fannie Mae.  Projects found to be eligible will be listed on as project reviews are completed, and qualified borrowers will be eligible for financing.

Special Approval designations are for established condominium projects only, effective for periods between 9 and 18 months, and lenders are required to confirm the project’s Special Approval designation on the date of the loan application.  “This new initiative is geared toward providing maximum support for Florida’s distressed condo market as we continue to provide liquidity to the housing market more broadly,” said Karen Pallotta, Executive Vice President, Single Family Mortgage Business.

“The state’s condo market has been particularly hard hit by the housing downturn and we’re working with the industry and our partners to do all we can to stabilize the market and help spur recovery.”  Moe Veissi, National Association of Realtors First Vice President agreed: “NAR applauds Fannie Mae for taking this important step to make condo loans more readily available in Florida…Our state is probably the hardest hit as far as the condo market is concerned, and Fannie Mae’s new effort
to take a closer look at project eligibility could go a long way to putting projects back on a healthy financial track.”

Thanks to Chris McLaughlin for some of the content above.

From time to time clients bring investment opportunities to me.

Concept: SeasonS is the creation of Chef Glenn, with over 20 years of culinary experience. The restaurant will have a casual (light Industrial) décor, comfortable and relaxing with an atmosphere that will complement the range of culinary skills that Chef Glenn will be serving, from pizza by the slice to Penne Rustica , all being served by an energetic and complimentary staff “ all our customers feel like family” not only Chef Glenn’s favorite saying but it is backed by recipes that are simple, home-made and consistent. Chef refined his skill in the small town of Fregene Italy and since that time has opened 8 restaurants in Sonoma County, with over 60 culinary awards both Nationally and Internationally a Food Network appearance and countless other accolades his success is well documented.

Project: A brand new 3500 sq ft Sports Bar & Grill including wood fired Pizza.

Location: Rohnert Park California, 589B Rohnert Park Expressway Rohnert Park, CA  94928 Located in one of Northern California’s largest shopping centers with major anchors, Target, Pet Smart, Food 4 Less, Burlington Coat Factory, and Reading Cinemas 16plex

Projected Revenue: Year one 1.2M, Year two 1.5M, Year three 1.75M Year four 2.1M

Demographic: Population 43,496 median income 64,500 (up 14% since 2000)

Ethnicity white 74%, Hispanic 13.6%, American Indian 4.1% our target customer base 91.7%.  Rohnert Park is a middle class community that is also the home of Sonoma State University, it draws a great deal of Sonoma County residents to its shopping areas due to the concentration of quality stores. SeasonS will be the only Sports Bar Grill and Pizzeria in Rohnert Park and Sonoma County, and will attract not only local residents but also draw from the entire County due to its location, its space being right next to the Reading Cinemas 16 theater complex.

Funding: 250k, 10 positions available at 25k each or any equal amount to 250K

Terms: A annual return of 6% to 9% to investors paid Quarterly, monthly financials will be emailed to all investors and there will be two investor teleconferences per year.

Completion Date: May 1st 2010 lease is in place, Tenant Improvement allowance, lease is below market rate, plans are approved by the center owners and construction is ready to begin!

Joe, It has been about two years since you first walked into my Petaluma restaurant! I will never forget the first time you tasted my food “the best Ceasar Salad I ever tasted”   thanks Joe I feel blessed to be working with you!

Charlie has a $25,000,000 green project in Snowflake AZ. He is looking to raise $2,000,000 from accredited investors immediately with another $12,000,000 by the end of 2010, and the balance of $12,000,000 in 2011. I’ll have the package this month.

Initial planning is for 200 units high end environmentally friendly homes ranging from 1800 to 2400 square feet. It’s build to suit built with SCIPS. It also includes a high end green retirement village on a total of 400 acres for both the homes and retirement village.

This is part of the Sliver River Gorge. There are eight petrogryphs on the property from the Anastazi tribe.

Charlie is not greedy. he wants this to be win-win for all. There are a lot of good people with money that can bless this area. If you are interested in this opportunity please call or write.

Joel owns a goldmine in the Yukon Canada. He’s looking for $10,000,000. He and his geologists believe there are 350,000 ounces of gold available on the property. He is looking for accredited investors. There is an opportunity to earn a fair return on your money and some equity in the mine.

Peter called me January 12th. He is in the gold business in San Diego. He has a small need of $25,000 for an opportunity. Please read what he has to offer carefully:

I am hopeful that you might personally be interested, as the return is substantial and soon…… the income will be even more substantial, also soon and ONGOING……………This offer pertains to the ANTWI 400KG transaction only.  For your review:

Again:    (25,000) invested today, which in 3 wks will yield:
25,000 return of investment
75,000 return on investment (3-4-1)

As you know I am able to offer you this because DgCC is the legal mandate and signatory for the Buyer.  Also, because the Buyer is a not-for-profit foundation owned by myself and my son, David.  David and I have no more cash to carry this forward, even though we are at the very threshold of delivery.  We are personally all tapped out, having invested over five million dollars of our cash, real property assets, and our time into DgCC over the last six years.

Perhaps you could consider this as an opportunity for you and your family.  Hopefully you will reconsider, and if you have an available $25,000, you will be able to wire the funds to me as soon as possible or before the end of the day……….Again, please email me your response………….or if you need more clarification please give me a call.

Joe, if I do not hear from you, I will not approach you again with regard to this matter……………

Thank you, Peter
David was referred by his brother Mike January 13th. he is attempting top put together investor money of $10,000,000 to purchase five goldmines in Nevada.

If you have liquidity and are interested in these and other opportunities please call or write. I was securities licensed Series 7 and Series 63 for 19 years. I am not licensed in securities presently.

From time to time clients bring opportunities to me. I am usually paid a fee on the back end for raising money and sometimes I am given equity in the project(s).

All investment involves risk. Do not invest with money that you cannot afford to lose. Past performance is not a promise of future performance. Conduct your own due diligence.

 By Suzanne Barlyn

NEW YORK (Dow Jones)–A proposal that would change how certain private placements are regulated could mean another hurdle for small businesses in a cash-strapped, recessionary environment.

Sen. Christopher Dodd’s draft legislation for sweeping financial reform includes a provision that would give back to state regulators the authority to oversee certain aspects of private placements, known as Reg-D offerings. States lost certain powers, such as the ability to review offerings and to prohibit bad actors from initiating Reg-D offerings, when Congress enacted the National Securities Markets Improvement Act of 1996, or NSMIA. That watershed law aimed to create uniform federal regulation of certain “covered securities” previously regulated at both the state and federal levels.

Small business advocates say that granting state regulators more authority over Reg-D offerings would mean navigating a regulatory quagmire.

Businesses that raise capital through Reg-D offerings would often be subject to the scrutiny of state regulators in multiple jurisdictions who could, for example, review and require numerous changes to their offering memoranda. Costs of raising capital would likely increase as companies fork over higher fees to lawyers and other consultants who would have to research whether the offerings are compliant with distinct state and federal requirements.

“It could put a lot of people out of business,” said Paul Azous, chief executive of LLC, a New York-based company that writes private placement memoranda – documents for investors that include information about a company’s business plan and other details.

If implemented, the change could ultimately encourage issuers to look abroad to raise capital, says Raymond Fisher, a securities lawyer for Linklaters in New York. “It’s better to have a uniform regime,” he said.

Sen. Dodd’s Reg-D proposal is among nearly 1,200 pages of draft reforms the Senate is considering following the passage of an historic financial regulatory reform bill by the U.S. House in December.

Lawmakers are discussing the draft at a time when many small businesses are raising capital through Reg-D offerings because banks have tightened lending standards. Most businesses aim to raise relatively small amounts through the process, which could be substantially offset by more expenses.

George Brunelle, a securities lawyer in New York, recalled advising one small business that was trying to raise $1 million in the pre-NSMIA era when states had more say over Reg-D offerings. The offering memorandum had to comply with standards in four states – a process he described as “crazy hard.”

State regulators argue that their current lack of authority under NSMIA means they’re often unable to help investors who voice concerns about offerings. Fraud related to private placement is multiplying, as is use of brokers to place them. Federal regulators recently have beefed up their enforcement efforts but not nearly enough to satisfy states.

The law allows state regulators to investigate cases involving fraud and deceit, but in many instances the evidence from investors gets to them too late. By then, they say, the money raised in the offering is often long gone.

“We have to wait until the forest fire is raging and then go put it out. I can’t go put it out before,” said Joseph Borg, director of the Alabama Securities Commission. He and other state regulators can only refer most complaints to the Securities and Exchange Commission, where they languish, they say.

The SEC’s inspector general, H. David Kotz, concluded in a March 2009 report that the agency “does not generally take action” when its staff learns that issuers haven’t complied with Reg-D requirements. It also doesn’t “substantively review” the more than 20,000 filings it receives annually, he wrote.

Lawyers and consultants who advise small businesses argue that the vast majority of private placement offerings are legitimate. “The masses shouldn’t have to suffer for the minority,” says Azous of

(Suzanne Barlyn writes Compliance Watch, a column that focuses on compliance and regulatory issues affecting financial advisers. She can be reached at 212-416-2230 or by email at
What material success does is provide you with the ability to concentrate on other things that really matter. And that is being able to make a difference, not only in your own life, but in other people's lives.
Oprah WinfreyLifeSuccessMoney 

Proverbs 15:22 Without consultation, plans are frustrated, But with many counselors they succeed.

Remember that we are here to serve you and those whom you choose to refer M-F 7AM to 5PM Pacific.

Joe Tufo, Certified Cash Flow Consultant, Certified Capital Specialist
P.O. Box 844
Alamo CA 94507
925-691-8200 Direct to my desk
800-669-2700 Business
206-984-2853 Fax

Fee and Commission Based.

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Business and Personal Lines of Credit $50,000 to $10,000,000, Large Project Funding $10,000,000 to No Limit, Commercial Loans, SBA Loans, Hard Money Loans, Church Loans, Factoring, Accounts Receivable Funding, Merchant Cash Advance.

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