Check Out An Investment
Whenever presented with an investment opportunity, the Utah Division of Securities encourages investors to thoroughly research the investment beforehand. Whether a security is publicly traded or privately offered, the information a prospective investor should receive is substantial.
For publicly traded securities, information is generally either reported to the Securities and Exchange Commission (e.g. earnings reports for companies that issue stock) or disclosed to investors in writing (e.g. mutual fund prospectuses).
For private securities offerings, similar information needs to be disclosed to investors, but often there is little oversight to ensure that investors have been afforded proper disclosure. Investors seeking to invest in such offerings need to ensure that the company has provided them with adequate disclosure.
Private Securities Offerings
Detailed information about a private offering can be found in a private placement memorandum (PPM), private offering memorandum (POM), or some similar type of disclosure document. These documents should be substantial in length (on average 30-60 pages) and cover all aspects of the business and the investment in the business. While not an exhaustive list, some of the following information should be included in the disclosure document: how the offering complies with securities laws, the business model; where returns will be earned; risks of the business and the investment; biographical information on the managers; any derogatory information for the company or its managers such as bankruptcies, criminal records, or civil lawsuits; and the terms and conditions of investing.
Tools and Resources
Division's Online Database
Investors can search the Division’s Online Database to determine if the company or its managers have made filings in Utah or whether the Division has taken any actions against them. Most securities offerings made in Utah require some type of filing with the Division.
SEC EDGAR Database
Investors can search SEC records to determine if the company has made any filings with the SEC. Most securities offerings require some type of filing.
Utah Division of Corporations
Investors can search Utah records to determine if the corporation is properly established in Utah and whether the principals have other businesses.
Investors can research county, state, and federal court records to determine if the company or managers have any records of concern.
Utah Department of Financial Institutions
For investments involving money lending, investors can search Utah records to determine if the company needs to be registered with the Dept. of Financial Institutions.
Utah Division of Real Estate
For investments that involve real estate, investors can search Utah records to determine if the companies and individuals involved are properly engaged in the real estate business.