Exempt securities on their own are not scams. They’re usually sold to wealthy investors who can afford the higher risks of these investments. Exempt securities are risky, and you could lose all your investment.
The scam usually starts with an unsolicited pitch to invest in a promising business that is about to go public. You may be told that the investment is available only to very wealthy people, but an exception will be made for you—all you have to do is sign some paperwork. This paperwork usually involves lying about how much money you make.