Silence is Not Golden: SEC No Action Letter Indicates that Certain Tenant In Common Interests are Securities

A No Action Letter issued by the SEC (the “Letter”) to Omni Brokerage, Inc., Argus Realty Investors, L.P., and PASSCO Companies, LLC (the “Issuers”) on January 14, 2009 indicates that the sale of certain undivided tenant in common interests (“TIC Interests”) evidencing joint ownership of real property likely constitutes a sale of securities, and therefore would be subject to the registration and anti-fraud provisions of the Securities Act of 1933 (the “Act”). The SEC had previously been silent as to whether it would treat the sale of TIC Interests as the sale of securities (rather than simply the sale of real estate). The Letter is the first guidance that the SEC has issued directly on the subject.

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