December 6, 2016
The SEC has been increasingly aggressive in bringing enforcement actions against those involved in transactions with unregistered broker-dealers. Recently, the SEC has imposed sanctions on private equity firms and managers for using unregistered broker-dealers. The SEC is also closely scrutinizing unregistered broker-dealer issues in its OCIE compliance exams of private investment funds.
Furthermore, fund managers and companies can be subject to SEC enforcement actions for aiding and abetting a finder’s violation of the broker-dealer registration requirements. In addition to SEC sanctions, the use of an unregistered broker-dealer brings the risk of rescission under federal and state securities laws.
These events show that involving finders in capital raising brings significant risks, and there is no safe harbor or clear distinction of a finders duties in the securities laws.
The SEC and FINRA have issued some guidance to clarify the distinction between a legally-operating finder and an unregistered broker-dealer. This guidance includes no-action letters, rules and interpretations for M&A brokers, investment platforms and crowdfunding participants. Further regulatory action also seems likely.
The panel will discuss these issues, analyze the legal pitfalls and provide practical guidance. For example, the panel will address the following questions:
• What activities require broker-dealer registration with the SEC and FINRA?
• What penalties and actions do issuers face in using unregistered broker-dealers in their capital raising efforts?
• How do the SEC and FINRA’s guidance on finder activities in the M&A arena inform the permissible activities of finders in the securities and fund arenas?
After the presentation, the panelists will engage in a live question and answer session with participants so they can answer questions about these important issues directly.
For more information or to register visit the website or call 1-800-926-7926 ext. 10
Ask for Use of Unregistered Finders to Solicit Investors on 12/6/2016
Mention code: ZDFCT