Catherine Bell explains how the SEC labels people "bad actors" for lying or fraud, and firms must exclude them. One business partner went to jail just for being associated with someone later convicted of a crime, showing how the label destroys careers and spreads liability.
Don't ever do anything that has you be labeled a bad actor because you can never, ever get rid of that label legally, ever, ever, ever lie or even embellish because it'll always come back and bite you. It's better to like be really conservative and undervalue like what it is you've done and how you've done it, because at least the team that's working with you knows how to work with that. But if there's been straight up like lying and fraud, this is a piece of what we're dealing with.
Bad people. Trying to play dumb to get away with shit.
Well, and what happens in the world of like, like I have, I'm, I have to— SEC is who I have to basically report to for all the deals. And there's something called a bad actor. And so when we're doing full background checks on people, if they've lied, committed fraud, like all these things, these are the things that have them be considered a bad actor. Therefore, I need to cut them out. To protect my investors. That's what I'm legally required to do. So don't ever do anything that has you be labeled a bad actor because you can never ever get rid of that label legally ever. Like once it's with you, it's with you and that's it. Never get rid. Like we have a friend of ours and I can tell his whole story, but long story short, him and his business partner actually went to prison for having lunch with a bad actor. And that bad actor a couple of years later did something illegal. And the judge went— the IRS went around them basically and said, you should have known, you should have known what they were doing. And because we can't catch him and he has left the country, we're putting you in jail because you were associated. So you guys need to get— this is really serious.
Why it's important to do the due diligence.
