Private placements offer businesses the opportunity to raise funds by selling shares to a relatively small number of investors as opposed to a public offering made through national securities markets.
Securities regulators have observed a steady and significant rise in the number of private placement offerings that are later discovered to be problematic, especially those made under National Instrument 45-106. Companies using this exemption can raise an unlimited amount of money without registering the offering with the Nova Scotia Securities Commission as long as they meet certain standards.
Although properly used by many legitimate issuers, the exemption has become an attractive option for con artists, as well as individuals barred from the securities industry and others bent on stealing millions of dollars from investors through false and misleading representations.
Remember to always do your own research before parting with your hard earned money. If you are unsure or feel unqualified to decide whether an investment is legitimate or not, ask for a second opinion. Have a financial adviser, accountant or lawyer take a look at the company’s paperwork.
Related posts:
- Top 10 Investor Traps of 2009 The North American Securities Administrators Association has released their list...
- Entertainment Investments – Top 10 Investor Traps of 2009 As promised last week, we are going to take a...
- Gold bullion and currency scams – Top 10 Investor Traps of 2009 The price of gold is high, and as a result,...
- Promissory Notes – Top 10 Investor Traps of 2009 Many seniors have lost their life savings by investing in...
- Natural Resource Investment Scams – Top 10 Investment Traps of 2009 Natural resource investment scams have been on the rise recently,...
Share & Bookmark This Story!
Bookmark on Delicious 
StumbleUpon 
Google Bookmarks
Tip'd
Financial Post Headlines
{ 0 comments… add one now }