Legal Question in Securities Law in Louisiana

Securities fraud

Is it illegal for a non broker or non securities dealer to offer the sales of stock in a company that is set for IPO later in the year.

Here are the facts:

A local farmer called us and said that he had a brother in law who worked at a internet dot com company and that as ''friends and family'' he could buy stock prior to the IPO of the company. He said that if we gave him money he would buy shares in his name and hold them foe six months when it would then be ''allright'' for him to tranfer the shares into our names. He took our money almost a year ago and to date has not given us any shares.

Is what he did illegal?

And would we have comitted a crime for agreeing to buy shares from him like this?

Thanks for your help!


Asked on 1/18/01, 10:49 am

1 Answer from Attorneys
Mark Tepper Mark A. Tepper P.A.

Re: Securities fraud

It is illegal to take money based on false and misleading statements. Unless you knew that you were engaged in illegal conduct, depending on the circumstances, you probably have no liability. I have seen similar type cses and usually the seller never had the stock. If you would like us to help you, we need more information.

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Answered on 2/14/01, 12:14 pm


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