Report Filed: Frank Robert Smith – Skytech International – Bob Smith – Robert Smith – Frank R Smith, – skytech-interactive.com sold shares of unregistered securities to non-accredited investor; lack of disclosure to investor; violated basic, fiduciary duties Huntington Beach, California!!
Frank Robert Smith sold shares of private stock (private equity) in a company called Skytech International, LLC (incorporated in the State of Nevada), to people in multiple U.S. States. I can confirm that at least one of the investors in Michigan well call him Ed is most definitely a non-accredited investor. I need to back up here for a second and say that the rules and regulations that govern these kinds of transactions are anything but obvious to the average person. It can get complicated which is the very reason why we have laws requiring that most investors (in high risk, private placements) be qualified to make such investment decisions. Those laws are there to protect unwary consumers and would-be, non-accredited investors. In the world of securities, there is no caveat emptor. Buyer beware does not apply here. If you want to sell stock to people, privately, then the rule is seller beware! Thats right. You have to make sure that the people who you are selling stock to are qualified to make such financial decisions! Ed is basically a blue collar, middle-class retiree who worked hard, was frugal, and succeeded in saving some money over the course of his entire working life. But hes not rich, by any means, and hes not at all savvy in the complicated world of venture capital and private equity. Ed will tell you himself that he didnt even know the definition of qualified investor when Bob sold him the shares.He didnt even know the word existed! He didnt know his rights as an investor. More importantly, Bob Smith never even bothered to verify Eds financial status and/or his qualifications to make such financial decisions! That was a red flag, to be sure. But heres the real kicker: Ed even told Bob Smith that Ed would like to make up for his retirement account losses (Ed took some serious losses to his 401k account leading up to and following the financial crisis in 2008, before purchasing the stock in June 2008)! Why is that important? Its important because, by making that statement about losses to his retirement savings, Ed was essentially telling Bob Smith directly that he was, in fact, an unqualified investor! So why would Bob Smith accept money from Ed in that situation? Ignorance is certainly not a defense. If you want to start selling private stock, you had better know what you are doing….no exceptions, no excuses. A qualified investor does not make risky investment decisions for the purposes of making up for his/her retirement account losses. A qualified investor who invests in private offerings should have a high risk tolerance and truly understand the risks involved. Ed had absolutely no idea what this was all about, and I can tell you that his true risk tolerance was not high enough to make . He only learned about Skytech after speaking with a family acquaintance- well call him Romeo who knew Bob Smith personally, and who told Ed that he had invested in Skytech. Romeo told Ed that he was really excited about his investment, and Ed became curious. He thought that Skytech really might be that once-in-a-lifetime, get in at the ground level type of investment opportunity that could multiply his initial investment, many times over. He didnt want to miss out. Because Ed trusted Romeo, and because Romeo seemed to be so optimistic about Skytech, Ed asked Romeo for Bobs phone number. After two brief phone calls, Ed sent Bob a check for $55,000 in exchange for 110,000 shaes (50,000,000 shares common stock authorized) in Skytech International. The premise for this was that Bob had some kind of incredible even revolutionary intellectual property (for electronics device(s) hardware and software) waiting in the wings. Some big company would surely want to pay millions for this thing. Im still not entirely sure what it even is, or does, or if a working prototype even exists. There’s a patent application, but I believe it’s pending at this point. All I know is that the device is supposed to be this really cool-sounding, techy device, complete with “lasers