Green Global Holdings LLC Investigation

December 5, 2014

Salas Wang LLC is launching an investigation for purchasers of Green Global Holdings LLC, an offering made under Rule 506 of Regulation D.  Public filings seem to indicate that over $10 million of this company has been sold to investors .  While not all offerings under Regulation D are risky, the Financial Industry Regulat0ry Authority has issued a warning to investors for Regulation D Offerings.  They warn:

Many private placements are offered pursuant to Regulation D of the Securities Act of 1933, which specifies the amount of money that can be raised and the type of investor that can be solicited to participate in the offering.

***Limited information about the issuer and management, and limited financial reporting. The offering document, sometimes called a private placement memorandum or term sheet, likely will contain limited information on the company’s business (and may not be provided at all, if the offering is sold only to accredited investors). And since many private placement securities are issued by companies that are not required to file financial reports, you may have problems finding out how the company is doing, and gauging how your private placement is likely to perform over time.

Further, the brokers that sell Reg D investments have to fulfill their suitability obligations:

In the context of a Regulation D offering, Rule 2310 requires broker-dealers to conduct a suitability analysis when recommending securities to both accredited and nonaccredited investors that will take into account the investors’ knowledge and experience. The fact that an investor meets the net worth or income test for being an accredited investor is only one factor to be considered in the course of a complete suitability analysis. The BD must make reasonable efforts to gather and analyze information about the customer’s other holdings, financial situation and needs, tax status, investment objectives and such other information that would enable the firm to make its suitability determination. A BD also must be satisfied that the customer “fully understands the risks involved and is…able…to take those risks.”

Accordingly, we are looking to learn more about how these products were sold.  If you invested in this company (or other Reg D investments) or have information about this investment, please call Jeffrey Salas at 312.803.4963 or fill out the contact form below.

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