Posted by Anonymous on 2011-07-14
Tags: Broker Dealer SaaS
Posted by Anonymous on 2009-12-13
Tags: Negotiation Broker Dealer
Posted by Anonymous on 2009-11-03
Tags: Operations Broker Dealer Europe
Posted by Anonymous on 2009-09-08
Posted by raisecapital on 2009-07-14
In California, 25501.5 of the Corporations Code gives any person who purchases a security from, or sells a security to, a broker-dealer that is required to be licensed, but is not, the right to bring an action for rescission of the purchase or sale, or if already sold, for damages. Five year statute of limitations, or two after discovery, which ever is first.
1029.8 of the Code of Civil Procedure was amended to cover people who should be licensed as a broker-dealer, but who are not and take a commission for selling securities.
The purchaser can sue the "finder" for damages, and may recover treble damages (limited to $10,000 above the purchase price) and may be awarded attorneys fees and costs.
Most important, the law give the investor the right to rescind their investment (get their capital back) for two years, which puts the capital at risk for that period of time. That may make additional rounds more difficult to raise.
So the finder is, in fact, guaranteeing the investment.
Has anyone run into this in fund raising? Have they asked the finder about it? Has anyone recouped their investment or known of someone who did using this law?
By the way, it is my understanding that this doesn't apply to officers of the corporation.PRIVATE: Members Only