b'Chapter 5Duties Owed to Investors If you are selling securities via a private placement or public offering of securities to private investors, you have certain obligations and duties to your investors. Failure to heed them could result in lawsuits, civil fines and, intheworstcase,criminalprosecutionandjail.Ifyouwanttobea successful asset manager, you need to know and understand these important obligations. Obligations Under Securities Laws First, you have an obligation under securities laws to not make any misrepresentationsoromitanymaterialfacts,ortootherwisemislead investors.Youhaveafurtherobligationtoprovideallmaterialfacts investors need make informed consent prior to making their investment decision. This means you, as the sponsor of the securities offering, are responsible for ensuring that every document you provide investors is complete and that every written and spoken statement made by you or any member of your asset management entity is 100% accurate. The single thing many asset managers get wrong when describing an investment opportunity is failing to accurately describe their past experience and specific roles in other investment groups, claiming they own other assets.Unlessanassetmanagerownssomethingontheirownwithout investors,itisneveraccuratetosaytheassetmanagerownsother 27'