Private Placement Investments

Broker-dealers and investment advisers are prohibited from selling private placements to investors who are not qualified according to SEC rules (specifically, Regulation D), which generally restrict such sales to “accredited” investors — those with a net worth of at least $1 million (excluding one’s home) and income of at least $200,000 for the prior two years ($300,000 if joint income). Broker-dealers and investment advisers who ignore these rules and sell risky private placements to normal investors in order to collect the high commissions associated with their sales generally do not have the investors’ best interests in mind, and by overconcentrating investors’ portfolios in these assets, expose them to unnecessary risk of loss.

If you lost money due to an investment adviser’s improper sale of a private placement investment, contact the securities attorneys at Rosenberger + Kawabata.