SEC Urges Investors to Be Cautious of Broadly Advertised Investment Opportunities

The SEC Office of Investor Education and Advocacy ("OIEA") and Division of Enforcement Retail Strategy Task Force urged investors to be cautious of investments that have been broadly advertised (i.e., "generally solicited") to the public. The SEC warned that an investment is not necessarily compliant with federal securities laws just because it has been widely promoted.

In an investor alert, the SEC recommended that, prior to making an investment, an investor should (i) ensure that the investment professional making the offering is registered, (ii) determine whether the offering is also registered and whether such registration is on the SEC's EDGAR website, and (iii) watch out for common "red flags" indicating fraud (e.g., aggressive sales tactics, no net worth or income requirements to invest, claims of high returns with little or no risk, etc.).