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Unregistered Securities
In addition to the issues of suitability and liquidity mentioned
above, the offering, purchase and sale of unregistered securities
have raised many issues and have caused substantial losses
to investors through the years. While private investments have
proven to be very successful for some, unregistered private
placements have also been disasters for many unsophisticated,
unknowledgeable investors.
The types of deals seem to change, but the basic concepts
of bad deals stay the same. Generally the bad deals are copycats
of what is hot in the market or are offering something too
good to be true. Historically we had tax sheltered real estate
limited partnerships, other tax sheltered deals, mining deals,
new age medical products, and high tech deals, among many others.
Currently, as a result of the low interest rates for income
investments, many of the private offerings promise high rates
of return from various investment trusts or partnerships. These
are often marketed with claimed safeguards or other assurances
against loss and are targeted at older persons who seek high
rates of interest.
The various problems and issues involved with unregistered
securities are too numerous and complicated to cover on a website.
It is suggested that any loses suffered by a client through
investments in unregistered securities should be referred to
an attorney knowledgeable in the area for review.
Next topic: Conclusion
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