Possible Investment Fraud

[Corey_Parsons]

My question is, I am sitting on the board of a company where the CEO is taking investments from private individuals without any kind of legal contract. The question I have is, since I am sitting on the board can I be held liable if these investments if they are not being used for the company? I am not a investor in this company personally but I would like to know what the steps would be to protect myself.

[Mr. Knowitall]

From that description, I have absolutely no idea what is happening, or what these transactions have to do with your company beyond the involvement of the CEO.

If you as a board member are participating in a fraud, or through your approval of actions you suspect to be fraudulent could be said to have participated or abetted the fraud, then yes... you could be looking at trouble down the road. Consider consulting a corporate lawyer... it's hard to say what type without knowing what is going on, but perhaps you should start with someone who practices securities or investment law.