One sentence on your website can violate securities law if it sounds like a promise instead of a projection. "We make quarterly distributions" is a promise; "We target quarterly distributions when cash flow permits" is a projection. Miss a promised payment and you've made a false material representation.
One sentence on your website can be a securities violation. Here's the test. Is this stated as a promise or as a projection with acknowledged uncertainty? We make quarterly distributions. That's a promise stated as a fact with no qualifier. We target quarterly distributions when cash flow permits. That's a projection with acknowledged uncertainty. It's compliant. Our investors receive an 8% preferred return. Promise. We target an 8% preferred return. Projection. The fund pays monthly distributions. Promise. The fund seeks to provide monthly distributions. This is not guaranteed. Projection. The content is identical. The legal exposure is not. In securities law, describing a return as a promise, a projection, can be treated as a material representation. Miss one payment and that sentence becomes a false statement in your offering documents. The language that sounds more confident is the language that exposes you the most. For a full audit checklist for your investor-facing page, see the long form linked in the bio.
