A New York luxury condo developer has run afoul of the state’s attorney general for failing to register required prospectuses for new condominium projects. Under the state’s Martin Act, real estate promoters must file prospectuses with the New York Department of Law (DOL) before selling syndications to investors and/or prospective unit purchasers.

In an announced settlement with the attorney general’s office, Peter Moore — described as “a prolific developer of properties in lower Manhattan” — has been fined US $50,000 and barred from the real estate securities industry for the next six months for knowingly procuring investors in an unregistered syndication. The luxury real estate brokerage firm he contracted to market a loft condo project, located in the city’s TriBeCa neighbourhood, has also been fined $7,500 and instructed to educate its brokers about obligations of the Martin Act.

“Promoters of real estate investments need to follow the rules,” asserts NY Attorney General Eric T. Schneiderman. “The Martin Act provides necessary protections to all investors, including homebuyers seeking to purchase a condominium unit.”

Syndications involve a group of individual investors, each contributing to collectively fund the real estate venture. A June 2013 memorandum from the NY DOL’s Real Estate Finance Bureau addressed the issue of the growing number of syndication offerings that also include the right to acquire a condominium unit in the development as part of the investment — concluding that project promoters must file two separate prospectuses for two distinct types of securities.

The Martin Act itself dates back to 1921 and is what’s commonly known as a blue sky law, which imposes standards for offering and selling securities.