Investment News reports that the US Securities and Exchange Commission and FINRA served Felix Investments LLC a Wells notice, signifying that the regulators intend to institute
sanctions for violating securities laws in connection with sales activities in 2010.
The article attributes the information to “two people with knowledge of the matter” and goes on to say that regulators have been investigating the trading in equity of closely held startup companies for over a year and that SharesPost Inc. is another potential target.
The regulators are apparently concerned that because the closely held companies are not required to make the same financial disclosure as public companies, investors are more susceptible to fraud.
Felix creates and sells pools of investments through which investors can purchase shares of non-public stock, like the recent offerings of Facebook and Twitter.
SharesPost acts as middleman lining up sellers with buyers. Trading of this type is for accredited investors, those with at least $1 million in assets and income of $200,000 or more.
Last year Goldman Sachs pulled their plan to offer $1.5 billion of Facebook equity to US investors citing “immense media attention” which might lead to a violation of SEC rules limiting the sale of private securities. Instead Goldman offered it only to non-US investors.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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