posted
I have recently started talking more about trading with a couple of co-workers of mine, and we have been trading stock "tips", in terms of what we're buying and when. At what point does it cross the line from telling a friend or friends what you are buying to the point of being able to get into trouble for acting as a "financial advisor" or whatever?
Also, my dad has asked me to take over his "fun money" brokerage account to buy what I buy (He gave me his username/password). Is that legal?
It all seems pretty innocent, and I can't imagine this type of thing would ever be target for any kind of SEC investigation, but does anyone know if either thing is "illegal" in technical terms?
posted
I'm no lawyer and such but in the first case of you and your friend i do not see it as being a financial advisor because you are not getting any monetary gain from your "tips" etc. He is not paying you for your advice... it is up to him to take you up on your tips or not...
As for taking over your father's account... i believe you can do that as long as your father signs a Power of Attorney that gives you control of the account...
If I am wrong on these two points someone can correct me... but seems straight forward....
-------------------- Let the world change you... And you can change the world.
posted
Thanks. But what about all those clowns that pump stocks all over message boards and then get arrested for not having a caveat that they are not financial advisors, etc? Is it that they ARE making money from others because of the buy volume that they bring in? If so, wouldn't it be the same thing if I told some co-workers and they all bought in? I'd be making money because the price would (possibly) go up because I told other people to buy?
Like I said, I'm sure what I'm doing isn't what anyone would waste their time going after, but I'm kind of curious.
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posted
I would agree with Mach. as far as pumpers getting arrested its usually because they are posting false info or fake press releases.
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posted
Paid pumpers don't have to be "financial advisers"...they simply need to reveal -- a disclaimer -- that they've accepted remuneration of some form, cash, stock, whatever...
Then a separate issue are the regs about misinformation, spam, etc...
When an individual gets in trouble, it's usually from soliciting folks' money that will be "invested" and generate some spectacular return... or, for instance, somebody's Dad was infirm and the kid browbeat him for access to the trading. Of course, boiler rooms are sumpin' else... Anyway, water-cooler chat doesn't qualify... you might say XYZ is going up or going down...if peeps believe you, that's up to them...it's merely public chatter. Now, if a company officer comes out to the water cooler and starts telling employees to take x-percent of every paycheck and buy company stock, that's beyond public chatter...
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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posted
Pumpers = give out false info or fake press releases on boards to get thousands of investors to buy in order for the pumper to sell there positions at a profit from the momentum of the fake info/press release....
you giving some stock advice to 2 or 3 coworkers would hardly make a stock move because it would take alot of shares and investors to move a stock's price...
-------------------- Let the world change you... And you can change the world.
posted
Just found out today that a good friend from college works for a law firm tah has a lot of securities lawyers (she, personally, does healthcare law). I am going to try to get some info next week about how complicated (if at all) it is to set up some kind of pooled account to see if I can set up an account where friends and family members give me money to trade for them. I'll post if I find out anything interesting.
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