SEC warns buyers, sellers of California IOUs
Attention Craigslist entrepreneurs: if you’re dabbling in California’s IOU market, the feds may be after you. KPCC’s Washington Correspondent Kitty Felde reports.
California may issue up to $3 billion in IOUs this month. If you’re patient, you can collect your money in October, plus 3.75 percent interest. But entrepreneurs on Craigslist are looking for folks who can’t wait and are willing to sell their IOUs for less than the dollar amount.
Not so fast, says the Securities and Exchange Commission. The regulatory agency says that the IOUs are securities and that people who buy and sell them “may need to register as brokers or dealers." The SEC says that failure to register could land you in court and could result in fines. Information about who needs to register can be found on the Securities and Exchange Commission Web site.
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- SEC Staff Statement on California IOUs
- SEC Guide to Broker-Dealer Registration: Who Is Required to Register
- How is California's budget mess messing with your life? Share your story with KPCC.
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