b'5. UNDERSTAND HOW SECURITIES LAWS APPLY TO YOUI cannot teach you to become an attorney. Instead I am teaching you the strategies you can employ, including the different ways you can use securities laws to legally raise the money needed for your business. This chapter will help you understand enough about securities laws to effec-tively syndicate real estate. The federal government enacted the Securities Act of 1933 (Securities Act) in the wake of the stock market crash of 1929. Its primary purpose was to protect the investing public. Securities were previously only reg-ulated at the state level under what is commonly referred to as blue sky laws. State regulation of securities left jurisdictional loopholes for people whose fraudulent investment schemes crossed state lines, allowing them to escape prosecution by hopping states when they were discovered. The Securities Act fixed this by defining securities at the federal lev-el and requiring the issuer to register all sales of securities prior to sale, or to qualify for an exemption from registration. Further requirements included disclosure of sufficient material facts for investors to provide informed consent before making their investment decision. Subsequent regulations have been created under this act requiring financial pre-qual-ification of investors and notification of securities regulators of the sale of securities, among other things. The Securities Exchange Act of 1934 (Exchange Act) imposed further regulations on the sale of securities and created the Securities and Ex-change Commission (SEC). The SEC enacted regulations requiring the licensing of persons selling securities on behalf of others. It made deceit, fraud and misrepresenta-tion in the sale of securities illegal. 33'