Return OF Capital Security Violations

The biggest issue that I see, which is actually a securities violation, you cannot call a return of capital cash on cash return. You cannot tell an investor in your prospectus, in your OM, in your business plan that that $10,000 that you’re giving them on a quarterly basis is a 10% cash on cash return. Because it’s not, it’s you just giving them back their capital. And so you can call it a lot of things. You can call it a distribution, you can call it like cash flow either, or sometimes we call it a cash flow distribution or whatever. But a lot of times I see the word cash on cash return, but you cannot call that cash on cash. It’s not cash on cash. And you’ve got to be really careful about using that language, because that is at best a material misrepresentation. And at worst, some people call it a fraudulent representation. I mean, that’s up for debate, whether it’s flat out fraud, it’s certainly maybe not intentional fraud, but it’s certainly a misrepresentation. For our purposes, it doesn’t matter. It’s something that A, needs to be disclosed, number one, but more importantly, we don’t want to misrepresent to the investors.