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Questions Answered by Robert W. Pearce
2 Answers | Asked in Estate Planning and Securities Law for Nevada on
Q: Do the State Courts have power to compel the company to lift restrictions on its stock?

The company refuses to lift restrictions on sale from the shares I inherited from my father who was an executive. They do not provide justification, looks like it is a bad faith to force me to sell the stock through them at a much lower price.

Father passed away 10 years ago after he... View More

Robert W. Pearce
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Robert W. Pearce
answered on May 31, 2021

Unless an arbitration agreement is tied to your father's shares you can file in court.

With a proper demand on the corporation, compliance with applicable exemptions from registration, and an opinion letter, restrictive legends can be ordered to be removed by a state or federal court...
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1 Answer | Asked in Securities Law for Texas on
Q: Can non-accredited investor, invest in a private fund registered under Rule 506(c) offering by forming an LLC?

SEC rule 506(c) mandates only accredited investors are eligible to contribute to the funds. So can non-accredited investor form an LLC to obtain accredited status? If yes, what are the terms and conditions that one should be aware off?

Robert W. Pearce
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Robert W. Pearce
answered on Apr 18, 2021

Either you are accredited or not! The issuer is not going to risk losing a safe-harbor exemption for registration to take on an unaccredited investor. And they it tells you otherwise, watch out!!

1 Answer | Asked in Securities Law for Oklahoma on
Q: What is the citation for securities offered and sold within Alaska being exempt from federal securities registration?

Are the applicable Alaska securities registration statutes and rules those found in Alaska statutes section 45.56.110 (2019) and Alaska statutes section 45.56 120 (2019)?

Robert W. Pearce
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Robert W. Pearce
answered on Mar 9, 2021

Read 45.56.100, 45.56.110, and 45.56.120

1 Answer | Asked in Securities Law for Oklahoma on
Q: In what circumstances can securities be exempt from registration when being offered and sold within Alaska?
Robert W. Pearce
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Robert W. Pearce
answered on Mar 9, 2021

They are exempt from the Federal securities registration statutes and rules but still subject to the Alaska securities registration statutes and rules.

1 Answer | Asked in Securities Law on
Q: Is a financial planner required to do a written yearly review of his client’s profile?

I trusted my financial planner and he had me initial or sign documents that I did not understand. He did not explain what I was signing and reassured me that he was taking care of me.

Robert W. Pearce
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Robert W. Pearce
answered on Feb 19, 2021

The term"financial planner" can mean different things to layman and professionals: e.g., a FINRA associate member registered representative (stockbroker); registered investment advisor; or certified financial planner. The stockbroker and//or his firm are required by FINRA to update your... View More

1 Answer | Asked in Securities Law for Georgia on
Q: If I purchase foreclosures to re-sell, using the money of another person am I at risk with SEC of selling securities?

I create an LLC with 1 other person that finances the purchases. I do all of the work. Houses are purchased in the name of the LLC. We are both 50/50 partners of the LLC. I sell the house and we split net profit 50/50.

If I do this with other investors, creating a separate LLC with each... View More

Robert W. Pearce
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Robert W. Pearce
answered on Feb 8, 2021

ONE INVESTOR IN ONE LLC MIGHT NOT BE A PROBLEM BUT THE MORE YOU DO THE CLOSER YOU COME TO BEING LABALED AN UNREGISTERED BROKER SELLING UNREGISTERED SECURITIES

1 Answer | Asked in Securities Law for Minnesota on
Q: If insider trading information was actually reflected in public information, is it still legal to trade off of it?
Robert W. Pearce
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Robert W. Pearce
answered on Feb 7, 2021

The insider trading violation is based upon trading with non-public information. However, if you are an officer, director, or in a fiduciary relationship or tipped by someone in that capacity, you my be accused of having other non-public information upon which you traded and still have a problem... View More

2 Answers | Asked in Securities Law for New York on
Q: A company disclosed material non-public information in a closed invite only industry conference. Does it make it public?

The company disclosed a slide that was released 2 months after and also heavily inclined about in an investor conference 2 weeks after. Does trading on the expectation of the release of something described in the slide is legal in this time period?

Robert W. Pearce
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Robert W. Pearce
answered on Dec 29, 2020

The answer depends on your relationship with the company and purpose of the disclosure. If your relationship is construed to be of a "fiduciary" nature and the information was shared in furtherance of that relationship then any trading based upon that information is likely to be "insider trading."

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2 Answers | Asked in Stockbroker Fraud and Securities Law for Texas on
Q: Can a broker (Charles Schwab) randomly closed my broker account.

I have my 401K and a 529 account with Charles Schwab. I opened a new acct on the 25th of Sept to attempt to trade. On the 6th they blocked my account for "fraudulent" reasons and the investigative team we supposed to call back within 48 hrs to discuss the matter. After several calls for... View More

Robert W. Pearce
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Robert W. Pearce
answered on Oct 12, 2020

You need to put them on Notice in writing of your objection to the freeze, remind them you have open positions and your intention to sue them for any and all damages unless they take your orders and unfreeze the account or hire an attorney to do that immediately.

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1 Answer | Asked in Securities Law for New York on
Q: Who notifies SEC when employment is terminated from an RIA with ~$200 million in assets under management?

I recently quit a job I was at for 9 months. Do I notify the SEC that I left or do they? and if I do, how do I go about doing this?

Robert W. Pearce
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Robert W. Pearce
answered on Oct 10, 2020

Both of you have the responsibility to make sure the IARD is accurate but you are the one that may have consequences. Go to the SEC website for the forms and guidance. https://www.sec.gov/divisions/investment/iard/iardfaq.shtml

1 Answer | Asked in Banking, Business Formation, Business Law and Securities Law for Virginia on
Q: Does a company need to register as a financial advisor if partners or members are only buying/selling securities?

Wanted to know because I'm looking to open a partnership or llc. No financial advice will be given to partners or members. One person would do all the transactions on behalf of company. This is for investment purposes.

Robert W. Pearce
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Robert W. Pearce
answered on Oct 8, 2020

If the transactions are by the Managing Member or General Partner for and only on behalf of the company in only its private securities account and the company is not in the business of just buying and selling securities as a Broker or Dealer then in my opinion no registration would be required.

1 Answer | Asked in Contracts and Securities Law for Tennessee on
Q: Can I sue someone for violating securities laws in federal court for soliciting investment from me in a project?

- the person asked me for money to fund a record

- I gave money, person made record. I didn’t get the promised return.

- person is not licensed to sell securities

Robert W. Pearce
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Robert W. Pearce
answered on Oct 2, 2020

You can only sue under the Federal securities laws if you were sold a security. The test commonly used by the courts to decide whether you were sold a security is known as the Howey Test. If you were the only investor who made a loan for a specific return of interest it's unlikely you were... View More

1 Answer | Asked in Securities Law for New York on
Q: Does sending startup pitch decks to investors break Securities law? What should we be aware of?

We are free service that sends decks to investors on behalf of startups that are raising funds.

Investors are a mix of professional investors e.g VCs and angel/HNWI and are all over the USA

Robert W. Pearce
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Robert W. Pearce
answered on Jul 28, 2020

A pitch book could be considered to be created "in connection with" an "offer" and/or "sale" of securities and subject you to liability under Federal and state securities laws.

1 Answer | Asked in Securities Law on
Q: Is the following considered insider trading?

If I come up with "the best idea since sliced bread" that I am going to present to a publicly traded company, but before contacting them, or even knowing whether they have an interest, I decide to buy stock in that company, is that considered insider trading?

Robert W. Pearce
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Robert W. Pearce
answered on Jul 28, 2020

If you are not an officer, director or controlling shareholder of the company and have no non-disclosure or other contractual agreement requiring confidentiality or otherwise considered in a fiduciary relationship then it is unlikely you will be deemed an insider.

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