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Questions Answered by Robert W. Pearce
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... Read more »

Robert W. Pearce
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
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.

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
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
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... Read 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
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
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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