Houston, TX asked in Business Formation, Business Law and Securities Law for Texas

Q: Can I start a business that sells bonds to friends and family, then invest that money in the stock market?

I'm an investor with 14 years experience. My friends and family all want my help because I've made excellent returns but it is my understanding that I can't help them, because I'm not a financial advisor, and they could sue me if they lost money (is that even true?). So I want to start a business that offers high-yield bonds to friends and family, like 10% or so, then invest that money in the stock market, and give them the bond yield and keep the difference as earned income. Is this idea legal or are there several regulatory issues I need to address?

1 Lawyer Answer
John Michael Frick
John Michael Frick
  • Frisco, TX
  • Licensed in Texas

A: Forming a brokerage firm like this and creating a bond to offer to members of the public is a relatively complex endeavor.

You need to contact a business formation attorney who handles SEC regulated securities firms to avoid potential criminal legal problems

1 user found this answer helpful

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