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Pre-IPO Offerings Carry High Risks



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Five Signs of Investment Fraud…And What to Do if it's Happened to You is intended to to expose the ugly truth behind investor fraud and its devastating consequences

Learn how to recognize the key signs of investor fraud and what to do if it's happened to you... BEFORE IT'S TOO LATE.  David P. Meyer is a renowned securities and investment fraud attorney. If you entrusted your investments to a financial professional and are worried that fraud or illegal conduct has occurred, you simply CANNOT take any chances, you NEED to get yourself a copy of this report today.

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The Financial Industry Regulatory Authority (FINRA) recently issued a warning to investors about pre-IPO offerings. While the focus was on scams involving social media, overall, pre-IPO investing is risky.

Many investors are constantly on the lookout for up-and-coming businesses that are sure to make a high profit. The idea of purchasing shares before the company goes public is enticing. Pre-IPO deals have been the source of great returns for investors, but have also been tied to significant losses.

The problem with pre-IPO offerings is that they are often fraudulent. For example, in December 2010, a self-employed securities trader was accused of defrauding over $9.6 million from 50 U.S. and foreign investors in pre-IPO scams. This man is now facing criminal charges for his alleged schemes.

Pre-IPO Offerings are Extremely Risky

Pre-IPO deals are risky for a variety of reasons, including:

  1. Unregistered securities are involved. While a company may be permitted to sell unregistered shares in private transactions, known as private placements, these deals can pose problems for investors. If you change your mind about the investment or need to liquidate before the company goes public, you will be confronted with many challenges.

  2. The company may never go public. There is no guarantee that the company will complete an IPO. If that happens, you may not be able to sell your shares and get back your investment.

  3. The offering may be illegal. Companies that want to offer securities must register with the U.S. Securities and Exchange Commission (SEC) or meet an exemption under the federal securities law. If a company doesn't register or meet an exemption, the offering is considered illegal.

  4. The securities may be restricted. Many privately purchased securities come with restrictions, such as limitations on when you can sell your shares.

When to Call an Investment Fraud Lawyer

If you have lost money in a pre-IPO offering, you should contact an experienced investment fraud lawyer to get advice. An attorney may be able to help you recover your losses.

For answers to your questions, contact an investment fraud attorney at the law firm of Meyer Wilson, LPA by calling toll-free 1.866.827.6537 or filling out our online form. The case evaluation is free.

Be sure to order a FREE copy of attorney David Meyer's book, Five Signs of Investment Fraud...And What to Do if it's Happened to You. You can learn more by reading the book description below.