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How To Dodge The Dangers Of Unregistered Securities

Law360, New York (April 16, 2015, 7:16 PM EDT) -- While buying and selling unregistered securities isn't necessarily illegal, broker-dealers are on the hook for verifying that securities are exempt from registration and that they're not part of a pump-and-dump or money laundering scheme. Here, securities law experts answer five frequently asked questions about dealing unregistered stocks.

What should broker-dealers and their attorneys do to make sure the securities they sell pass muster?

The Securities Act of 1933 requires that all offers and sales of securities in interstate commerce be registered unless they’re specifically exempted. Under Section 4(a)(4) of the act, broker-dealers are exempt from registration when they’re involved in the execution...

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