• claims of high returns with minimal risks;
  • securities being offered by unregistered investment professionals;
  • aggressive sales tactics, including those that create a false sense of urgency on behalf of the investor;
  • “sloppy offering documents” or the absence of any offering documents;
  • offerings that do not request investors’ net worth, which is required information for many types of private securities offerings;
  • offerings in which no person other than the sales person seems to be involved;
  • issuers of securities that have offices or mailing addresses in states in which they have no legitimate business operations;
  • failure of the issuer to be in good standing in its state of incorporation or formation;
  • unsolicited investment offers; and
  • suspicious or unverifiable biographies of managers or promoters.

The Office of Investor Education and Advocacy also advised prospective investors in private placements to take the following steps to protect themselves:

Issuers and their agents should consider the guidance set forth in the Alert when undertaking private offerings of securities in order to avoid raising investor concerns.