Caveat emptor! No, caveat venditor! Buyer beware! No, seller beware!  

By: Blayne Rush, MHP, MBA


In 2008, Dwight Shane Baldwin of Utah, who ran several venture capital funds called the
SilverLeaf Companies, sold equity in one of his companies for $200,000 to two buyers. 

He told them that the company would use their money to invest in a California company called GarageCo, Inc., which makes a plastic toy called “Yo Baby.”   The lawyer who advised Mr. Baldwin on the sale assured him that because the company was selling equity investments ­
­­– not securities like stock
– that he was exempt from registering as a “broker-dealer” at either the state or federal level.
That assurance did not stop the Utah Division of

Securities from charging Baldwin with securities fraud and offering and selling securities as an unlicensed broker.   He escaped jail time by repaying the investors in full and negotiating a “guilty plea in abeyance.”