George Geek is a computer programmer who tired of working for others and started his own company. He convinced forty investors that he could design software that would rival Microsoft, and sold them each a 10% partnership interest in his firm for $25,000. He designed and printed up the partnership certificates himself.
George told the investors that he had a product that was on the verge of being marketable and that when it did-within the next two months-revenues would pour into the company, and he would begin paying dividends.
He told them they could expect a 20% return on their money this year, with even higher returns in the years to come. As it turned out, George wasn't quite the programmer he thought he was, and he wasn't able to get all the bugs out of the program to make it marketable within the promised two months.
Within a year, George had tired of the project and was too busy picking up chicks in his new Corvette when he wasn't on the island of St. Bart overseeing the construction of his new beach mansion-and picking up chicks.
His activities, of course, were financed by the extremely generous "salary" he paid himself from the investors' monies.
Under the Uniform Securities Act, do the investors have any civil claims against George?
When a client has purchased securities on margin, the broker-dealer
The C&S Railroad is in the process of issuing new bonds. Before these bonds can be offered for sale,
Your client calls you with a market order to purchase 500 shares of the stock of Oracle and asks when
payment will be due. If today is Wednesday, September 15th, you inform the client that payment is due on
An agent cannot tell a client that a mutual fund is "no load" if the fund has
I. a front-end load
II. a contingent deferred sales load
III. 12b-1 fees
