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Stark General Exception

Returns on investments (e.g., dividends and interest) in securities of entities with net tangible assets related to the furnishing of health care items or services > $50 million provided:


  1. the securities are registered with the Securities and Exchange Commission;

  2. referring investors’ securities are obtained at the same price as is available to the general public trading on a registered securities exchange through a broker and referring investors’ securities are not subject to restrictions on transferability;

  3. entity and referring investors do not favor passive investors over non-investors in promoting and/or furnishing the entity’s items or services;

  4. entity and its investors (and persons acting on their behalf) do not finance (or guarantee financing of) any purchase of the entity’s securities by a person who could make or influence referrals; and

  5. returns (e.g., dividend payments) are directly proportional to capital investment.

2. Space Rental

Sources: 42 C.F.R. § 411.357(a)

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