Signs of Offering Fraud
For a company to sell or offer securities, the Securities and Exchange Commission (SEC) requires it to register the securities with the SEC or request that the securities be exempt from registration. These securities are known as unregistered offerings or private placement. These offerings are not subject to the same protections as a registered security with the SEC would be.
For this reason, you should be cautious of unregistered offerings that are designed not to raise funds from investors but to scam them instead. Offering fraud occurs in any scam that withholds facts or presents false facts to investors in a company.
If a representative presents you with a “once-in-a-lifetime” opportunity that urges you to invest quickly and make an immediate decision regarding his or her private placement, chances are it’s a scam. Any reputable representative will give investors the time necessary to do their research on the investment without creating a sense of undue urgency.
Unsolicited investment opportunities should always raise a red flag. Whether the investment comes from a close friend, family member, coworker, or someone you’ve never met or heard of, you must consider why the investment is being presented to you out of the blue.
You should absolutely be leery of the investment if you are asked to keep the opportunity confidential; fraudsters are notorious for maintaining the secrecy of their scams.
No Risk, High Returns
Possibly the most frequently seen promise among those committing securities fraud schemes is the promise of low risk and high returns. There is no investment opportunity out there that comes with no risk, and it’s common knowledge that the greater the return is expected to be, the higher the risk associated with it is.
Call a Securities Fraud Whistleblower Lawyer
Do you believe you might have been presented a scheme involving offering fraud, or have you fallen victim to such a scheme and need help reporting the information you have to the SEC? If so, get in touch with a qualified securities fraud whistleblower lawyer at Meissner Associates today.
You can schedule a free claim evaluation by filling out the form at the bottom of this page or giving us a call at 1-866-764-3100.