• videocam On-Demand Webinar
  • signal_cellular_alt Intermediate
  • card_travel Corporate Finance
  • schedule 90 minutes

Finders and Unregistered Broker-Dealers: Understanding the Risks and Recent Developments

Avoiding the Pitfalls of Broker-Dealer Registration Violations, Lessons From SEC Enforcement Actions and SEC Guidance

$347.00

This course is $0 with these passes:

CLE
ALL
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About the Course

Introduction

This CLE course will analyze the legal pitfalls for securities issuers who utilize unregistered "finders" to solicit investors, the SEC's restrictive position on permissible activities of finders, activities that require broker-dealer registration, and SEC regulatory actions regarding unregistered broker-dealers.

Description

On Oct. 7, 2020, the SEC proposed a conditional exemption for finders, which would operate as a nonexclusive safe harbor from the broker registration requirements of Section 15(a) of the Securities Exchange Act of 1934. The proposed exemption would permit natural persons to engage in certain limited activities on behalf of issuers with private placement offerings. The SEC received over 90 comment letters overwhelmingly critical of the proposal, including state regulators. Unfortunately, no further action has been taken with respect to the proposal, but it remains instructive on the status of brokers and finders.

More recently, on Mar. 28, 2022, the SEC proposed two rules that would clarify the meaning of certain terms in the statutory definitions of "dealer" and "government securities dealer" under, respectively, Sections 3(a)(5) and 3(a)(44) of the Exchange Act. The rules would encompass liquidity providers in the markets--firms that were previously relying on the trader exemption.

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. Besides SEC sanctions, the use of an unregistered broker-dealer brings the risk of rescission under federal and state securities laws. Involving finders in capital raising thus carries significant risks and there is no safe harbor or clear distinction of a finder's duties in the securities laws.

Listen as our authoritative panel of securities practitioners discusses legal pitfalls for securities issuers using unregistered "finders" to solicit capital and the SEC's position on unregistered brokers' permissible activities.

Presented By

Pablo J. Man
Partner
K&L Gates, LLP

Mr. Man is a partner in the firm's asset management and investment funds practice. He represents investment advisers, closed-end funds (including exchange-traded closed-end funds, registered funds of hedge funds, and interval funds), alternative mutual funds, and private funds (including hedge funds and funds of one).

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Eden L. Rohrer
Of Counsel
McIntyre & Lemon, PLLC

Ms. Rohrer specializes in securities broker-dealer regulatory matters, including broker-dealer status analysis, registration, compliance, and enforcement defense. She represents a broad range of clients in connection with traditional broker-dealer activities and activities involving new technologies such as digital assets, cryptocurrencies, utility tokens, NFTs, distributed ledger technology, digital wallet providers, DeFi applications and protocols and Web3-related businesses. Ms. Rohrer’s broker-dealer practice includes the assessment of whether proposed activities require broker-dealer registration or qualify for an exemption. For decades, she has successfully shepherded firms through the FINRA new membership application process and the FINRA continuing membership application process to obtain approval for changes of ownership and control.

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Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

Date + Time

  • event

    Wednesday, May 31, 2023

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

  1. Securities laws applicable to activities of unregistered broker-dealers
  2. The SEC's proposed conditional exemption for finders
  3. The SEC's proposed rulemaking to clarify the definition of dealer and government securities dealer
  4. Finders under various states' laws
  5. Finder-related exemptions, including M&A brokers, JOBs Act, bulletin boards, crowdfunding portals
  6. Regulatory enforcement actions

The panel will review these and other key issues:

  • Activities requiring broker-dealer registration with the SEC and FINRA
  • Legal pitfalls for issuers who use unregistered broker-dealers in capital-raising efforts
  • Finder-related exemptions