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

Mr. Man primarily represents investment advisers, registered closed-end funds (including tender offer and interval funds), and private funds (including exchange funds, hedge funds, and funds of one). His practice centers on regulatory matters relating to the Investment Advisers Act of 1940. Mr. Man also brings substantial experience to the formation of pooled investment vehicles both registered and exempt from registration under the Investment Company Act of 1940. Mr. Man is highly knowledgeable in the application of the Securities Act of 1933 to private investment funds as well as continuously-offered registered closed-end funds offering their interests in private placements, encompassing offerings without and with a general solicitation. He counsels investment advisers ranging from emerging managers to large global firms on all aspects of their operations, including registration and “status” questions, regulation and reporting, SEC examinations, seeding arrangements, and mergers and acquisitions. Among other things, Mr. Man guides clients on matters relating to custody, recordkeeping (including electronic records), trading, principal and cross-transactions, best execution, performance advertising, fiduciary duty and conflicts. He also has a significant practice counseling clients with respect to “wrap” and model portfolio programs. With respect to registered funds, Mr. Man acts as fund and independent trustee counsel. In addition, he regularly advises fund sponsors and finders with respect to broker “status” issues, including the so-called issuer exemption under Rule 3a4-1, in connection with offers and sales of fund securities.

Ms. Rohrer concentrates her practice in securities broker-dealer regulatory, compliance, enforcement defense, litigation and arbitration matters in the financial services and fintech industries. She advises emerging and established companies on the development, regulation and operation of funding portals, capital raising platforms and trading platforms, including in connection with angel investing, crowdfunding, in the private and public securities markets. Ms. Rohrer’s practice involves all aspects of broker-dealer regulation, including Self-Regulatory Organization membership, cross border transactions and chaperoning of foreign broker-dealers (under SEC Rule 15a-6). She also provides regulatory guidance to investment banking clients in connection with securities offerings and related trading issues. Ms. Rohrer is a leader in the M&A Broker space as one of the six lawyers who authored the request to the SEC for No-Action relief for mergers and acquisition brokers—the M&A Brokers No-Action Letter. The M&A Brokers Letter allows M&A brokers to receive transaction-based compensation without registering as securities brokers with the SEC.