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Taylor Swift’s Due Diligence Saves Her from FTX Debacle
Taylor Swift is known for her chart-topping hits, sold-out tours, and a savvy business sense that has helped her become one of the most successful musicians of all time. But did you know that she also has an eye for due diligence? When approached by the now-bankrupt crypto exchange FTX about a $100 million sponsorship deal in 2021, Swift asked a critical question that ultimately saved her from potential legal troubles: “Can you tell me that these are not unregistered securities?”
In this article, we will delve into what unregistered securities are, why they are problematic, and how Taylor Swift’s question about them helped her avoid a costly mistake with FTX.
What are Unregistered Securities?
The US Securities and Exchange Commission (SEC) defines a security as “any investment product that can be traded, such as stocks, bonds, options, and futures contracts.” Securities are regulated by the SEC to ensure that investors are protected from fraud and misleading information.
Unregistered securities are those that have not been registered with the SEC, either because they are exempt from registration or because the issuer has not complied with the registration requirements. Issuing unregistered securities is illegal and can lead to severe legal consequences.
