When does an investment become a security?
I was under the impression that when you pool together investors on a syndicated deal, you have essentially created a security. I was having lunch with a local syndicator with several deals going and he told me that he doesn't have to comply with securities laws because his deals have fewer than 50 investors. I've looked into 506b and 506c and I don't recall there being a number of investors threshold. Can anyone help me out here?