I actually take securities laws pretty seriously and so should you. The laws covering securities offered as a private placement aren't all that different then the laws covering registered securities.
Here's a little something that simple covers making the offer in the first place. Judging from the number of people who PMed me, saying that they received the same offer, then I think it would be easy to prove that there was a general solicitation and little attempt was made to discover the suitability of the investment BEFORE the solicitation was made.
What Limitations Exist on the Manner of the Offering?
Neither the issuer of the securities nor any person acting on its behalf can offer or sell the securities by any form of general solicitation or advertising. Such exclusion includes, but is not limited to, any advertisement, article, press release, mass mailing, notice or other communication published in a newspaper, magazine, or similar media or broadcast over television or radio. Realistically, this provision requires that the issuer controls the number and kind of offerees so as to show that no general solicitation occurred. Practical steps include a determination that (a) the prospective investor is an "accredited investor," or otherwise meets the standards established by the issuer and (b) investment in the securities would be a suitable investment for the prospective investor.
Ideally, each prospective investor should have a pre-existing relationship with the issuer, its officers, directors, or affiliates of sufficient contact to determine suitability.
Any questions concerning what might constitute general advertising or general solicitation should be discussed with counsel.
Then he did something any first year stock broker trainee knows you can't do, he mentioned possible returns.
The entry level here is at a market cap around $25 MM, and I believe that sometime in the next decade, once the markets become exuberant again, their market cap could easily exceed $25 B, thus a potential 100 to 1000 "bagger".
Then he's on the board of the company. The board is explicitly prohibited from making any written solicitation outside of company direct contact.
Think there's a law out there about talking about the specifics of the company and its financing outside of what is covered in the offering?
They are seeking right now some bridge financing until they get their major injection of funds from some "big boyz", but these "boyz" are taking their sweet time.
Bridge financing? This is outside of the bounds of even blue skied offerings. Can't make any such claim or innuendo, nor make explanations about operational status of the company. |
