Summary

Conclusions____________________________________________________________

• To avoid violating Section 17(b), give the exact specific source of any compensation
• Give the exact amount of compensation – past, present or promised in the future
• and give the type of consideration (e.g. stock, cash, or combination of cash and stock)
• Do not say you are independent if you are not
• When you are given stock, use reasonable inquiry to make sure that it is not actually restricted
• Beware of stock from affiliates of the company and their associates
• Stay away from fraudulent promotions
• Do not trade if you have inside information
• Do not engage in scalping
• Do not sell stock at far less than the target price you are giving

• It is legal:
  • for investor relations firms to be paid for recommendations,
  • for investor relations firms to be paid in free trading stock,
  • for investor relations firms to be paid by third parties,
  if Section 17(b) is complied with.