Q: I want to charge a subscription for stock tips based on my trading algorithmI am a successful private trader. Legal?

I will not handle anyone else's money for them.

I will provide only the stock tips, and advisement on how best to limit risk, and set goals.

Anyone taking my advice makes their own decisions.

Do I need a license to do this?

1 Lawyer Answer
James L. Arrasmith
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  • Criminal Law Lawyer
  • Sacramento, CA

A: Providing stock tips and investment advice through a subscription service, even without directly handling others' money, often falls under the regulatory oversight of both federal and state securities laws. In New York, as well as under federal law, individuals or entities providing investment advice typically need to be registered as investment advisers.

The definition of an investment adviser is broad and can encompass various activities, including issuing reports or analyses on securities. Since you plan to charge for your service, this could be interpreted as engaging in the business of providing investment advice for compensation.

Before proceeding, it would be wise to consult with a legal professional knowledgeable in securities law. They can help you understand the specific requirements and regulations that apply to your situation, including whether you need to register as an investment adviser or if any exemptions might apply to you.

Compliance with these regulations is crucial to avoid potential legal complications or penalties. A legal professional can guide you through the process of setting up your business in accordance with the law.

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