We spent some time on this one. We wanted some leverage in our system to guard against inactive members while not being too prescriptive on attendance. Our stipulation in the Bylaws states that a member can be removed by a 2/3's majority if "deemed to be passive or non-participating as defined by the SEC under the Securities Act of 1933."

Truth is no one ever wants to be expelled. If they aren't showing up ask them politely to withdraw. Failing that, you do have this as a second option (that we've never used).

Jimmy

James P. Dickerson | TLP Investment Club

Sent from my iPhone

On Aug 8, 2015, at 3:04 AM, Mark Eckman <mark2459@gmail.com> wrote:

Maybe go about this from the member side. Your club banded together to learn and earn from sharing the knowledge, work and capital of each other. If you have a member only willing to contribute capital, maybe they need to rethink membership.

Mark Eckman

On Fri, Aug 7, 2015 at 11:53 AM, <Jednotakid@comcast.net> wrote:

Contacted the SEC concerning investigating investment club members attending club meetings.

There answer We cannot confirm or deny any investigations.

Our club members would hope the SEC has more important things to do than investigate to see

if ten member investment clubs are having full attendance at there meetings.

Does the member who has a 1% interest in the club benefiting from the member who has 11%?

Frank

---

From: "John Huff" <coach@hufftribe.com>
To: "club cafe" <club_cafe@bivio.com>
Sent: Friday, July 31, 2015 2:46:06 PM

Subject: Re: [club_cafe] Required Attendance

Here is a link from the SEC website about investment clubs.

http://www.sec.gov/investor/pubs/invclub.htm

I am not a lawyer nor am I offering any legal advice but based on this website, I think you can draw some conclusions:

1) The government does have an opinion on this topic.

2) They have a test they would use, to determine if you were operating as a club or not, if they had an unhappy club member complain to them.

3) The tone of the information page is non-threatening. They don't seem to be trying to discouraging the existence of clubs. To me that seems to indicate they are not aggressively going after clubs

4) It seems most clubs would pass the test as a club not an investment company or security offered for sale but what you do and how you do it could have an effect on how they classify you.

Regards,

John

On Fri, Jul 31, 2015 at 12:39 PM, Mike Jones via bivio.com <user*21595500001@bivio.com> wrote:

We amended our by-laws to allow us to request that non-participants withdraw. The situation described isn't really a mutual fund, but the benefit a non-participant receives is similar, i.e. they pay money for someone else to manage a portfolio and then share the benefits with no real effort on their part. That sounds a lot like a mutual fund but not much like a partnership.

Mike Jones

Wall$treet Wannabees

Bloomington, MN

---

From: DAVE NATHANSON <dave.hss@nathanson.org>
To: club_cafe@bivio.com
Sent: Thursday, July 30, 2015 12:38 PM
Subject: Re: [club_cafe] Required Attendance

I believe the problem to avoid is allowing your investment club to be recharacterized as a mutual fund. That would be bad.

One of the important differences is participation. Not attendance, but participation. Be guided by your bylaws, but also wonder if your bylaws cover this well enough.

Thanks,

Dave Nathanson

Hawaiian Shirt Society

On Jul 30, 2015, at 10:23 AM, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Two things:

From a set of bylaws available to me:

Four absences in a twelve-month period is cause for removal of a partner. A partner with four absences shall be considered an inactive partner and shall be contacted by the club inquiring as to the intentions of the partner in regards to the club.

If your club is successful you are dong the work and the member is receiving the benefits; that is not fair!

Further, inactive members should be NON-voting members.

We have a provision for temporarily allowing non-attendance.

Bob

On Jul 30, 2015, at 1:13 PM, William E Muhlke <weomuhlke@hotmail.com> wrote:

What action would your club take with an original "Founding" member who no longer attends Investment Club Meetings and has 11% holdings of investments in the club?

We spent some time on this one. We wanted some leverage in our system to guard against inactive members while not being too prescriptive on attendance. Our stipulation in the Bylaws states that a member can be removed by a 2/3's majority if "deemed to be passive or non-participating as defined by the SEC under the Securities Act of 1933."

Truth is no one ever wants to be expelled. If they aren't showing up ask them politely to withdraw. Failing that, you do have this as a second option (that we've never used).

Jimmy

James P. Dickerson | TLP Investment Club

Sent from my iPhone

On Aug 8, 2015, at 3:04 AM, Mark Eckman <mark2459@gmail.com> wrote:

Maybe go about this from the member side. Your club banded together to learn and earn from sharing the knowledge, work and capital of each other. If you have a member only willing to contribute capital, maybe they need to rethink membership.

Mark Eckman

On Fri, Aug 7, 2015 at 11:53 AM, <Jednotakid@comcast.net> wrote:

Contacted the SEC concerning investigating investment club members attending club meetings.

There answer We cannot confirm or deny any investigations.

Our club members would hope the SEC has more important things to do than investigate to see

if ten member investment clubs are having full attendance at there meetings.

Does the member who has a 1% interest in the club benefiting from the member who has 11%?

Frank

---

From: "John Huff" <coach@hufftribe.com>
To: "club cafe" <club_cafe@bivio.com>
Sent: Friday, July 31, 2015 2:46:06 PM
Subject: Re: [club_cafe] Required Attendance

Here is a link from the SEC website about investment clubs.

http://www.sec.gov/investor/pubs/invclub.htm

I am not a lawyer nor am I offering any legal advice but based on this website, I think you can draw some conclusions:

1) The government does have an opinion on this topic.

2) They have a test they would use, to determine if you were operating as a club or not, if they had an unhappy club member complain to them.

3) The tone of the information page is non-threatening. They don't seem to be trying to discouraging the existence of clubs. To me that seems to indicate they are not aggressively going after clubs

4) It seems most clubs would pass the test as a club not an investment company or security offered for sale but what you do and how you do it could have an effect on how they classify you.

Regards,

John

On Fri, Jul 31, 2015 at 12:39 PM, Mike Jones via bivio.com <user*21595500001@bivio.com> wrote:

We amended our by-laws to allow us to request that non-participants withdraw. The situation described isn't really a mutual fund, but the benefit a non-participant receives is similar, i.e. they pay money for someone else to manage a portfolio and then share the benefits with no real effort on their part. That sounds a lot like a mutual fund but not much like a partnership.

Mike Jones

Wall$treet Wannabees

Bloomington, MN

---

From: DAVE NATHANSON <dave.hss@nathanson.org>
To: club_cafe@bivio.com
Sent: Thursday, July 30, 2015 12:38 PM
Subject: Re: [club_cafe] Required Attendance

I believe the problem to avoid is allowing your investment club to be recharacterized as a mutual fund. That would be bad.

One of the important differences is participation. Not attendance, but participation. Be guided by your bylaws, but also wonder if your bylaws cover this well enough.

Thanks,

Dave Nathanson

Hawaiian Shirt Society

On Jul 30, 2015, at 10:23 AM, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Two things:

From a set of bylaws available to me:

Four absences in a twelve-month period is cause for removal of a partner. A partner with four absences shall be considered an inactive partner and shall be contacted by the club inquiring as to the intentions of the partner in regards to the club.

If your club is successful you are dong the work and the member is receiving the benefits; that is not fair!

Further, inactive members should be NON-voting members.

We have a provision for temporarily allowing non-attendance.

Bob

On Jul 30, 2015, at 1:13 PM, William E Muhlke <weomuhlke@hotmail.com> wrote:

What action would your club take with an original "Founding" member who no longer attends Investment Club Meetings and has 11% holdings of investments in the club?

The "problem" with your provision is that the Securities Act of 1933 does not address passive or non-participating at all. While the Investment Club FAQ at sec.gov states that an investment club could be deemed to be issuing a security and therefore be subject to the 1933 Act if it has passive or non-participating investors, the determination of passive or non-participating is based on the governing documents of the investment entity, not the voluntary actions taken by one or more investors. In other words, a passive investor is one who has limited or no authority to influence the decisions of the entity.

Thank Ira. We did this about 15 years ago, so I've forgotten most of the sources. What you are saying (for our case), that if the rules of the club were to prevent a partner from being able to actively participate (limited or no authority to influence the decisions of the entity), we would have an issue. But if opportunity is available and the partner chooses NOT to participate, this would not constitute an issue.

Correct?

Jimmy

James P. Dickerson

polymerguy@yahoo.com

From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of ira smilovitz
Sent: Sunday, August 09, 2015 12:04 AM
To: club_cafe@bivio.com

Subject: Re: [club_cafe] Required Attendance

The "problem" with your provision is that the Securities Act of 1933 does not address passive or non-participating at all. While the Investment Club FAQ at sec.gov states that an investment club could be deemed to be issuing a security and therefore be subject to the 1933 Act if it has passive or non-participating investors, the determination of passive or non-participating is based on the governing documents of the investment entity, not the voluntary actions taken by one or more investors. In other words, a passive investor is one who has limited or no authority to influence the decisions of the entity.

Ira Smilovitz

On Sat, Aug 8, 2015 at 10:27 AM, James Dickerson via bivio.com <user*78700001@bivio.com> wrote:

We spent some time on this one. We wanted some leverage in our system to guard against inactive members while not being too prescriptive on attendance. Our stipulation in the Bylaws states that a member can be removed by a 2/3's majority if "deemed to be passive or non-participating as defined by the SEC under the Securities Act of 1933."

Truth is no one ever wants to be expelled. If they aren't showing up ask them politely to withdraw. Failing that, you do have this as a second option (that we've never used).

Jimmy

James P. Dickerson | TLP Investment Club

Sent from my iPhone

On Aug 8, 2015, at 3:04 AM, Mark Eckman <mark2459@gmail.com> wrote:

Maybe go about this from the member side. Your club banded together to learn and earn from sharing the knowledge, work and capital of each other. If you have a member only willing to contribute capital, maybe they need to rethink membership.

Mark Eckman

On Fri, Aug 7, 2015 at 11:53 AM, <Jednotakid@comcast.net> wrote:

Contacted the SEC concerning investigating investment club members attending club meetings.

There answer We cannot confirm or deny any investigations.

Our club members would hope the SEC has more important things to do than investigate to see

if ten member investment clubs are having full attendance at there meetings.

Does the member who has a 1% interest in the club benefiting from the member who has 11%?

Frank

---

From: "John Huff" <coach@hufftribe.com>
To: "club cafe" <club_cafe@bivio.com>
Sent: Friday, July 31, 2015 2:46:06 PM
Subject: Re: [club_cafe] Required Attendance

Here is a link from the SEC website about investment clubs.

http://www.sec.gov/investor/pubs/invclub.htm

I am not a lawyer nor am I offering any legal advice but based on this website, I think you can draw some conclusions:

1) The government does have an opinion on this topic.

2) They have a test they would use, to determine if you were operating as a club or not, if they had an unhappy club member complain to them.

3) The tone of the information page is non-threatening. They don't seem to be trying to discouraging the existence of clubs. To me that seems to indicate they are not aggressively going after clubs

4) It seems most clubs would pass the test as a club not an investment company or security offered for sale but what you do and how you do it could have an effect on how they classify you.

Regards,

John

On Fri, Jul 31, 2015 at 12:39 PM, Mike Jones via bivio.com <user*21595500001@bivio.com> wrote:

We amended our by-laws to allow us to request that non-participants withdraw. The situation described isn't really a mutual fund, but the benefit a non-participant receives is similar, i.e. they pay money for someone else to manage a portfolio and then share the benefits with no real effort on their part. That sounds a lot like a mutual fund but not much like a partnership.

Mike Jones

Wall$treet Wannabees

Bloomington, MN

---

From: DAVE NATHANSON <dave.hss@nathanson.org>
To: club_cafe@bivio.com
Sent: Thursday, July 30, 2015 12:38 PM
Subject: Re: [club_cafe] Required Attendance

I believe the problem to avoid is allowing your investment club to be recharacterized as a mutual fund. That would be bad.

One of the important differences is participation. Not attendance, but participation. Be guided by your bylaws, but also wonder if your bylaws cover this well enough.

Thanks,

Dave Nathanson

Hawaiian Shirt Society

On Jul 30, 2015, at 10:23 AM, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Two things:

From a set of bylaws available to me:

Four absences in a twelve-month period is cause for removal of a partner. A partner with four absences shall be considered an inactive partner and shall be contacted by the club inquiring as to the intentions of the partner in regards to the club.

If your club is successful you are dong the work and the member is receiving the benefits; that is not fair!

Further, inactive members should be NON-voting members.

We have a provision for temporarily allowing non-attendance.

Bob

On Jul 30, 2015, at 1:13 PM, William E Muhlke <weomuhlke@hotmail.com> wrote:

What action would your club take with an original "Founding" member who no longer attends Investment Club Meetings and has 11% holdings of investments in the club?