Corporation Selling Stock

[rexlaser]

California, A Company that I invested with through a Private Placement Memorandum did not get an exemption from the SEC under Regulation D or filled out the Form D that SEC said is required. Is it necessary for a California Corporation to follow these requirments in order to sell stock? The Company claims that they are following the guidlines of regulation D section 4(2) but SEC said that they have no information about the Company. Would these violations have any effect on my stock?

 

[ALawyer]

There are BOTH California and Federal laws that apply to sales by a company of its securities.

Some Federal exemptions do not require any filing with or notice to the SEC, others do. A pure section 4(2) private placement does not necessarily require a filing.

If the company did not comply with all the applicable laws there may be an opportunity for rescission. And of course, even if there was an exemption from registration, that does NOT mean there was an exemption from the anti-fraud provisions of the securities laws.