Saturday, August 30, 2014

Sales of Private Securities

Sales of Private Company Securities________________________________________
In an SEC complaint against The Investors Registry, LLC (TIR) and Michael J. Southworth, the SEC alleged that Southworth oversaw the sale of at least 650 memberships in TIR which he marketed as an exclusive investment community where members would be provided with opportunities to invest in pre-IPO companies. He represented that TIR researched thousands of early-stage companies and culled them down to only a handful of promising issuers that TIR profiled as investment opportunities.
From 2007 to 2011 Southworth touted five issuers by e-mail and by posting offering and subscription materials on TIR's website. He also helped structure terms of the offerings. He was not registered as a broker-dealer but contracted for and received cash and stock from issuers in exchange for acting as a broker in recommending and selling their securities and he failed to fully inadequately disclose this consideration the TIR memberships. Thus, here we have a case that involves the private sales of securities and not securities trading in the public market.







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