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Private Placements 101

A private placement, also sometimes known as an unregistered offering, is a way for companies to raise money from investors without having to conduct a public offering. 

Sources: U.S. Securities and Exchange Commission, Indiana Secretary of State What is a private placement? A private placement, also sometimes known as an unregistered offering, is a way for companies to raise money from investors without having to conduct a public offering.  Many of the companies that raise money this way are privately held startups.  Private placements are not subject to some of the disclosure requirements and other regulations that public offering are. Who can invest? Generally, private placements are restricted to accredited investors.  Accredited investors are individuals who meet one of two criteria:  they earned more than $200,000 (or $300,00 together with a...

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Former Indianapolis payroll exec pleads guilty in $9.4M fraud scheme

An Indianapolis man who operated a downtown payroll services business pleaded guilty to federal charges Friday after admitting to conducting a fraud scheme that cost his clients and Internal Revenue Service more than $9.4 million, the U.S. Attorney’s Office announced.

By Indianapolis Business Journal Staff An Indianapolis man who operated a downtown payroll services business pleaded guilty to federal charges Friday after admitting to conducting a fraud scheme that cost his clients and Internal Revenue Service more than $9.4 million, the U.S. Attorney’s Office announced. David Downey, 50, who ran Time Payroll from 2009 to 2017, faces a possible prison sentence of six years, plus fines of up to $750,000. He also could be ordered to pay restitution to his clients and the IRS. U.S. District Judge Catherine Perry scheduled sentencing for Dec. 13. Downey, who had clients in Indiana, Illinois, Kentucky and...

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Amish businessman ordered to pay $5.2M in scam targeting his own community

Amish businessman ordered to pay $5.2M in scam targeting his own community

By James Leggate of FOXBusiness.com A man who authorities said took advantage of his Amish heritage to recruit novice investors into a fraudulent scheme has been ordered to pay $5.2 million, most of it to his clients. Indiana resident Earl Miller’s 72 investors lost more than $4.1 million when his investments failed, according to a complaint from the Securities and Exchange Commission in 2015. He had encouraged people to put their retirement savings into his fund, which he had no experience in managing, by advertising “double digit annual returns” and promising a fixed-rate return of 8 percent to 12 percent per year,...

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Indiana family files lawsuit against e-cigarette manufacturer

Indiana family files lawsuit against e-cigarette manufacturer

By Sandra Chapman of WTHR 13 in Indianapolis A Carmel, Indiana family is taking on one of the largest e-cigarette manufacturers in the country. In a federal lawsuit filed in Indiana, Tom McCullogh said high levels of nicotine and youth-centered marketing caused his son to become addicted and is behind a growing crisis in central Indiana. In the 18-page lawsuit, McCollough said his son began "juuling" at the age of 15 and quickly became addicted to Juul e-cigarette products. According to the lawsuit, Juul creates flavors to appeal to teens and has had a marked effect on underage vapers. In addition, the suit alleges...

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NWI tied to medical-device kickback scheme, federal lawsuit states

A surgeon with ties to Northwest Indiana received millions of dollars from a medical-device company accused by the federal government of paying off doctors to use its products, a recently filed federal whistleblower lawsuit reveals.

By Giles Bruce of The Northwest Indiana Times A surgeon with ties to Northwest Indiana received millions of dollars from a medical-device company accused by the federal government of paying off doctors to use its products, a recently filed federal whistleblower lawsuit reveals. An Indiana surgeon identified in the civil complaint only as "Dr. A" — and who performed surgeries in Hobart, Merrillville and Munster — generated "by far" more revenue for Huntley, Illinois-based Life Spine than any other physician, including more than $22.9 million overall and roughly a quarter of sales in 2016 and 2017 alone, the lawsuit alleges. The second...

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Bishop Timothy L. Doherty’s statement on Father David Hasser

Bishop Timothy L. Doherty’s statement on Father David Hasser

NOTE: Andrew Miller is a partner at Starr Austen & Miller LLP. Mr. Miller’s client received a $225,000 settlement paid by the Diocese of Lafayette-in-Indiana to resolve her claims of sexual assault and harassment by Fr. David Hasser, a Diocesan priest and its Director of Vocations. Mr. Miller was able to negotiate the settlement with the Diocese of Lafayette-in-Indiana prior to filing a lawsuit. As an additional condition of settlement, Mr. Miller and his client insisted that the Diocese publicly acknowledge Fr. Hasser’s conduct and also that it retract its prior statement announcing Fr. Hasser’s departure from his position as...

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SEC Sues Trucking Co. Exec Over Vehicle-Swapping Scheme

SEC Sues Trucking Co. Exec Over Vehicle-Swapping Scheme

By Reenat Sinay of Law360.com The president of a major trucking company subsidiary defrauded investors by hiding losses through a truck-swapping scheme and false financial reports, according to the U.S. Securities and Exchange Commission's suit filed in Indiana federal court Thursday. Danny R. Williams carried out the deceptive transactions in 2016 and 2017, when he was the head of Quality Companies LLC, a subsidiary of the Indianapolis-based Celadon Group Inc., which operates shipping lines in the U.S., Canada and Mexico, the SEC said. In order to avoid a write-off when Celadon wanted to offload old vehicles, Williams swapped 900 of Quality's old trucks...

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3rd Circ. Revives ERISA Class Action Against UPenn

3rd Circuit Revives ERISA Class Action Against UPenn

By Emily Brill for Law360.com The Third Circuit breathed new life into a proposed Employee Retirement Income Security Act class action against the University of Pennsylvania on Thursday, reviving claims that the school's retirement plan squandered workers' savings on steep administrative fees and high-cost, low-return investment options. In a 2-1 decision, the court revived two breach-of-fiduciary-duty claims against the university, writing that the proposed class of current and former Penn workers "plausibly alleged that Penn failed to conform to the high standard required of plan fiduciaries" when operating its retirement plan. The suit accused Penn of allowing its plan to pay $4.5 million...

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Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

By: Tim Evans and Tony Cook, Indianapolis Star In court filings and responses to online complaints, Morris contends he merely referred investors to Oceanpointe and several related entities. Investors' anger and lawsuits are misplaced, Morris said. “Clayton Morris and Morris Invest identify with the many investors who lost money through home-renovation, property-management, and other failures by Oceanpointe and its various corporate entities and employees," Hensel said in the emailed statement. "Clayton Morris and his family purchased properties and were similarly damaged by Oceanpointe’s misconduct. The Morris family and Morris Invest have lost hundreds of thousands of dollars. Clayton and Morris Invest deny all allegations...

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SEC’s Self-Report Project Nabs $125M In Deals With 79 Firms

SEC's Self-Report Project Nabs $125M In Deals With 79 Firms

By Rachel Graf of Law360.com Seventy-nine investment advisers that self-reported steering clients to funds with relatively high fees have agreed to repay investors about $125 million, but will avoid additional fines under a U.S. Securities and Exchange Commission initiative announced last year. Investment advisers including Deutsche Bank Securities Inc., Wells Fargo Clearing Services LLC and RBC Capital Markets LLC settled the SEC’s claims that they recommended mutual fund share classes with recurring fees over lower-cost options, the agency announced Monday. The SEC said these recommendations created a conflict of interest since the investment advisers benefited from the fees. The advisers didn’t disclose these...

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