Starting my own Investment Club?

[Slinger]

What is the name of your state? California

I am looking for information on all the legal issues I am going to run into.

Do I need to register with the SEC?
What do I need to do within the State or County?
How to increase members if we can't solicit? Are there other ways of advertising?
Is there a spot I can go look and get most my questions answered or do I just need to contact an attorney?

Thanks for the time given on this one!

 

[Whatamimissing]

here's a start:

www.better-investing.org

www.iclubcentral.com

 

[Slinger]

Thanks for those links, but I have already been to both

Another couple legal questions:

Am I allowed to pay out referral fees to my members?

Can the main "trader" for the organisation get a bonus for reaching certain profits for the members on a monthly basis?

Thanks!

 

[divgradcurl]

Thanks for those links, but I have already been to both

Another couple legal questions:

Am I allowed to pay out referral fees to my members?

Can the main "trader" for the organisation get a bonus for reaching certain profits for the members on a monthly basis?

Thanks!

Are you the same person that was asking about these investment clubs last week? If not, I'll tell you the same thing I told that person -- any time you want to act as a broker are a trader, you come under the heavy regulation of the SEC, and if you are not already intimately familiar with all of the regulations -- and you clearly aren't, or you wouldn't be asking basic questions here -- you absolutely need to talk with a securities attorney to help guide you through all of the regulations. Like getting a license to do what you propose, for example. Since you can go to jail for violating these regulations, it's best to work with an experienced attorney.

You'll also want to work with a tax lawyer as well, as every trade involves capital gains computations, and you'll want to make sure you keep on top of all of that paperwork.

Or do what real "investment clubs" do, and move offshore to a country (like the Caymans, or Belize) with a more relaxed attitude towards trading.