Unregistered Securities

When you (through your financial advisor) purchase securities that are unregistered and an exemption for registration does not exist, you may be able to rescind, or reverse, the purchase.  In recent years, a type of “unregistered security” that has been foisted upon unsuspecting investors is the “promissory note.”  Typically, the broker or advisor will present an investment as a private opportunity, only available to a select few.  Often, the “promissory note” will represent an investment in a business about which the advisor’s employer is unaware.  This is called “selling away” – the sale of an unapproved product.  Investors need to be very careful about whom they choose to do business with, as well as being careful about the investments they agree to purchase.