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Sep 5, 2018 by |

San Francisco and California Securities Fraud Attorney: Private Placement Fraud


High-Risk Private Placements

Private placements are securities offerings that are not registered with the Securities and Exchange Commission (SEC). Companies raise billions of dollars through private placements, especially small or start-up companies. Investing in private placements is risky and can tie up your money for a long time; because the offerings are not registered with the SEC the chances for issuer fraud are serious. The California securities fraud attorneys at Evans Law Firm, Inc. represent investors victimized by fraud through private placements and other kinds of security fraud.  If you’re in California and a victim of securities fraud call our securities fraud lawyers today at (415)441-8669.

You generally must be an “accredited investor” to invest in private placements. Broadly speaking, you must have a net worth (excluding your home) of over $1 million and annual income of $200,000, or $300,000 if married.  As a result of these thresholds, brokers target high net worth individuals for private placements.  If a broker or advisor offers you sales material or a term sheet for a private placement, keep these tips in mind:

  • Find out as much as you can about the company and its business.
  • Ask your broker what information he or she reviewed before making the recommendation.
  • Consider whether the investment fits in with your other investments.
  • Carefully review the offering memorandum with a professional who will not gain by your investment.
  • Read the issuer’s Form D (financial information) if available on the SEC’s EDGAR database.
  • If the private placement is for a real estate venture, ask about the schedule and source of promised investor distributions.
  • Ask whether the private placement is being sold on a conditional or contingency basis and whether if the conditions or contingencies are not met, you get your money back. If there are no contingencies, be wary. An offering that can proceed without a minimum level of investment or other conditions could be a red flag. That means the issuer has immediate access to your money regardless of whether anyone else invests.
  • Avoid private placements you hear about through emails or cold calling. They could be very fraudulent.

Our California securities fraud lawyers always encourage you to use the free and simple search tool found at Be cautious of any broker or advisor or firm with a history of misconduct, including disciplinary actions by the Financial Industry Regulatory Authority (FINRA).  By taking this simple step, you may protect yourself against potential fraud.  Proceed with caution on any private offering and always review the offering with a professional with nothing to gain from your investment.

Contact Us

If you have been defrauded by a broker or advisor through securities fraud, call Ingrid M. Evans and the other San Francisco and California securities fraud attorneys at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with securities and other investment fraud, financial elder abuse cases and complex qui tam or whistleblower cases including offshore tax avoidance cases, complex financial contract cases and cases against large insurance companies.  We can help guide your case through a jury trial or toward an equitable settlement.  We also handle cases involving physical elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

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