What do I have to do in a "legal" sense, in order to take someones money and invest it in equities?

by: admin Monday, March 30th, 2009

I've traded Equities for 10 years, and I have a lot of requests from people to invest through me. What do I have to do, in order to protect myself from lawsuits and other legal complications?

(1) you need a letter giving you the discretion to trade the account. Usually this comes in the form of a power of attorney.

(2) you probably should be a Registered Investment Adviser, although, if you do it for fewer than 15 people and don't advertise, you may qualify for an exemption. Even if you are exempt, it would still offer you some protection.

(3) you should have a written contract, beyond the POA, specifying that nobody will sue anybody and that disputes will be arbitrated.

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One Response to “What do I have to do in a "legal" sense, in order to take someones money and invest it in equities?”

Ted Said:

(1) you need a letter giving you the discretion to trade the account. Usually this comes in the form of a power of attorney.

(2) you probably should be a Registered Investment Adviser, although, if you do it for fewer than 15 people and don't advertise, you may qualify for an exemption. Even if you are exempt, it would still offer you some protection.

(3) you should have a written contract, beyond the POA, specifying that nobody will sue anybody and that disputes will be arbitrated.
References :

Comment made on March 31st, 2009 at 5:22 am
 

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