We represent investors who lost money invested in private placements that were unsuitable for their investment profile, or fraudulent.

A private placement is an alternative method for companies to raise capital, as distinguished from a public securities offering or traditional bank financing. In a private placement, an issuer of securities – which securities can range from stocks to bonds or promissory notes, and other types – approaches, typically through a broker or sales agent, individual investors who meet certain levels of wealth and sophistication, and offers those investments to them privately.

  • Key features that classify a security as a private placement include:
    a limited number of “accredited” investors
    the securities are not publicly offered
    the securities are not registered with the securities regulators

Accredited investors are defined as, most typically, individuals or corporate entities that have a net worth in excess of $1,000,000, (excluding residence) or annual income in excess of $200,000 (or $300,000 jointly with a spouse) in the two most recent years.

  • Unfortunately, regulators have found significant problems in the private placement due diligence and sales efforts of some brokerage firms. Brokerage firms have a duty to conduct a reasonable investigation concerning the private placements issuer’s representations concerning the security, and there are several red flags that an unregistered offering may be a scam, including the following:
    Aggressive sales tactics
    Unregistered investment professionals
    Problems with sales documents, including atypical offering materials
    Claims of high returns with little or no risk
    No involvement by typical securities industry “gatekeepers”
    Unsolicited investment offers, often through cold calls
    Suspicious or unverifiable biographies of managers or promoters
    No net worth or income requirements

If you believe you may have lost money in a private placement offering scheme please contact us for a free, no- obligation consultation regarding your legal situation and potential recovery options, by phone at 888-998- 0530, via email at arosca@roscalaw.com, or through the contact form on this page.