Illinois securities regulators have charged a man who changed his name to Kareem Abdul-Jabbar with violation of Illinois’s Securities Act. According to the regulators, Abdul-Jabbar sold at least one promissory note to an investor for $55,000 without telling the investor that he had been convicted of a felony (the charge does not detail the previous conviction). The Illinois regulators charge (correctly) that a prior felony conviction would be important to a reasonable investor and that the omission was, therefore, legally material.
Notice three things about this case. First, it involved the sale of a promissory note. Promissory notes have become the vehicle of choice for investment scamsters. Beware anyone who tries to sell you one.
Second, notice the alleged failure to reveal a criminal background. What do you know about the person who has access to your life savings? How much of it came from a source other than the broker or investment adviser? How much of it have you verified? People who have been convicted of troubling crimes have to earn a living when they leave prison. Many of them go into the investment business. None of them talks about it when soliciting your trust.
Finally, notice the name change. While I do not know the defendant involved in this case, many scam artists have narcissistic tendencies. Being the center of the universe is extremely important to them. Could wanting to have a famous name be a symptom?
Return of investment is more important than return on investment. Smart investors understand their vulnerability and take sensible precautions. Others often lose their life savings.