What is the difference between a registered and unregistered security?

A registered security is a financial instrument that has been approved by the U.S. Securities and Exchange Commission (SEC) and is available for trading on a national securities exchange or over-the-counter. Unregistered securities are not approved by the SEC and cannot be traded in any national or regional exchange. The SEC requires that companies registering securities provide comprehensive disclosure documents, including financial statements and other information about the company. These documents are available for potential investors to review. The SEC also requires ongoing disclosure of information about the company’s business and financial condition. This is to ensure that investors have a complete understanding of the company and its investments. In contrast, unregistered securities do not have to provide any disclosure documents or ongoing disclosure of their financial condition. As a result, investors in these securities have a much less complete understanding of the company’s business and investments. This lack of information increases the risk of investment fraud and other illegal activities. In Washington, securities fraud is a crime and is punishable under both state and federal law. For this reason, investors should always seek advice from a qualified investment professional before investing in unregistered securities. To protect yourself and your investments, make sure to ask questions and seek legal advice before investing.

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What is the difference between a registered and unregistered security?

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