Further proof that you can do just about anything as long as you disclose it first.
Take the recent enforcement action “In the Matter of Ross Mandell (Initial Decision Release No. 478, January 3, 2013)” The Findings of Fact section has this little gem:
“The private placement memorandum (PPM) issued by the company to investors stated that the money raised through the placements would be used for legitimate business purposes. Instead, the money was used at Mandell’s discretion for non-business purposes, including vacations, trips to London, evenings at strip clubs and brothels; none of this was disclosed in the PPM.”
And if you did include this in the PPM under “Use of Proceeds” do you need to make attendant disclosures about communicable diseases in the “Risks” section?