Take a thorough read through their offering letter. It says it all. The old man obviously didn't do his own due dilligence before handing over a half mill. Know what you sign is really the lesson here for the investor.
I don't see the SEC imposing too harsh of a penalty
The Fund, through its Investment
Manager intends to focus on private placement investments in microcap public companies
The Fund’s strategy is
sometimes referred to as ‘‘special situations’’ investing because it is designed to capture capital
appreciation generated by a significant proposed corporate event such as a merger, acquisition,
product launch, corporate restructuring or reorganization.
An investment in the Fund is suitable only for persons who have adequate means of providing for
their current needs and personal contingencies and have no need for liquidity in their investments.
The Fund's investment practices, by their nature, involve a substantial
degree of risk. Investors will not have an opportunity to select or evaluate any of the Fund’s
investments, or to review the Fund’s securities positions at any given time This one would be a redflag to me as an investor
Investors in the Fund are subject to a
total loss of their investment and should be able to bear the risk of a total loss of their
investment in the Fund.
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