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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