What Every Investor Should Know
An investment contract is a transaction whereby a person invests his or her money in a common business enterprise and is led to expect profits from the entrepreneurial or managerial efforts of the promoter or a third party. To fall within
the scope of the definition of a security, an investment contract must involve all of the above elements.*
Almost any type of product can be included in an investment contract, which is considered to be an alternative investment. Commission reminds investors to consider the risks associated with alternative investments, including entrepreneurial
type of investment programs, which must either be registered with the Commission’s Securities Division or have qualified for an exemption from registration.
When considering alternative investment programs, investors should request proper written information such as a prospectus or offering materials before they invest. The documentation should contain enough clear and accurate information to allow investors
or their advisers to evaluate and verify the particulars of the investment.
Even when investing with someone they know investors should verify the registrations of sellers and investment opportunities and investigate disciplinary histories by contacting the Investigator on Duty at the Arizona Corporation Commission’s Securities
Division: 602.542.0662 or toll free in Arizona, 1.866.VERIFY-9 (837.4399), or via email at firstname.lastname@example.org.