b'How to Legally Raise Private Moneyception that if one does a small number of these transactions, even for separate issuers, it is OK. While that is true in some states, it is not true at the federal level.The SEC Form D filing for Regulation D offerings requires identifica-tion of all persons who will receive compensation from the offering. The states get a copy of the Form D with the state securities notice filing. Fail-ure to disclose such compensation is a violation of securities laws and may amount to fraud with respect to the Form D filing. The states regu-larly police the Form D filings that they receive by making further inquiry into the nature of such finders. They ensure that they are appropriately licensed as a securities broker-dealer within their jurisdiction. The rule is that an issuer cannot pay compensation to unlicensed per-sons who refer investors to their offering unless such persons have sub-stantial responsibilities associated withmanagement ofthe company, other than raising money. Their compensation is acceptable as long as it is unrelated to the amount of money they refer to the issuer. Anything else will be viewed as a commission.So, whats an issuer to do if they know someone who can introduce them to wealthy investors? Bring them into your management team; dont pay them compensation based on how much they have raised; and make sure they have other duties and thats what they get compensated for. In real-ity, most issuers who do this will carve out a piece of the managements earnings to compensate such persons. To defend the action, they and the issuer need to be able to show what their other duties are. Recall that the states often impose a further restriction that no com-pensation may be paid to unregistered persons for selling the securities. If you are found to have paid commissions to an unlicensed person, the state could revoke your exemption. It could also prosecute the issuer for selling unregistered securities and the person receiving the commission for acting as an unlicensed broker. These offenses could be a felony in some states. As of January 1, 2016, California passed a rule allowing individuals to register as finders by submitting an application and a fee to the state. To qualify the finder, the investment and the investor must all be in Califor-nia. 36 Proposed federal legislation would also allow finders to be paid a fee in certain instances without having a securities license. You can get 36 California Corporations Code section 25206.1, Effective Jan 1, 2016 110'