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8 Cards in this Set

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Must meet 4 elements to be considered:

1. An investment of money

2. In a common enterprise

3. With the expectation of profits

4. Solely from the efforts of others

Viatical Investment

Person with a terminal disease can sell life insurance payout for cash now. Only sell to suitable investors:

1. Minimum net worth of $150,000 (not including residence) and annual income of $100,000 or

2. Minimum liquid net worth of $250,000 (not including residence)

Ponzi scheme

Pyramid scam where returns received by earlier investors are derived from capital from subsequent investors

Registration Information

1. Amount of securities offered

2. Any adverse ruling entered in connection with the offering by a state regulatory authority, court, or the SEC

3. Other states in which a registration statement has been or will be filed

Filing Fees

Fees to be paid at the time of filing and annually during renewal. If not paid, Administrator may issue a stop order and suspend sale of the security. Varies state to state

Effective Date/Expiration Dates

Effective Date is the date on which the appropriate regulator releases the security for public distribution. Administrator may also require quarterly reports by the same person who filed initial registration statement.

Expiration come one year after effective date.

Types of Securities Registration

1. Notification (Filing)

2. Coordination

3. Qualification

Notification (Filing)

Used by well-established corporations that meet stringent financial requirements. Usually larger issuers that trade on a national exchange and have previously registered with SEC. Must meet specific requirements:

1. Registration filed under '33 Act

2. Issuer is organized under laws of US or a state, or has appointed a duly authorized agent in US for service of process

3. Issuer has registered with SEC a class of equity securities held by 500+ people

4. Issuer has:

-Total net worth of at least $4,000,000 or total net worth of $2,000,000 and net pretax income for at least 2 of previous 3 years

-Not less than 400,000 units of the class of securities registered under Section 12 of the '34 Act are held by the public, excluding securities held by officers and directors of the issuer, underwriters, and persons beneficially owning 10% or more of that class of securities