• 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 brokers and "finders" to solicit investors. The panel will provide an overview on activities that require broker-dealer registration, permissible activities, and state law considerations for finders, recent case law against unregistered dealers, and the recent federal decision vacating the SEC's rules expanding the definitions of "dealer" and "government securities dealer."

Description

Historically, the SEC has not been aggressive in bringing enforcement actions for broker-dealer registration violations, except in cases involving certain types of disfavored conduct and more recently against participants involved in the cryptocurrency industry. The SEC under the current administration, however, has been dismissing those cases and has been reducing its enforcement efforts across the board.

Additionally, the SEC's 2024 rulemaking to expand the definitions of "dealer" and "government securities dealer" (the "Dealer Rule") was vacated on Nov. 21, 2024, in two cases before the District Court for the Northern District of Texas and the SEC recently withdrew its Fifth Circuit appeal. This means that the pre-Dealer Rule status quo on dealer registration remains intact for now.

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, state regulatory actions, and contractual violations with investors and counterparties. Involving finders in capital raising thus carries significant risks, and there are only limited exemptions for finder activities.

Presented By

Derek Lacarrubba
Chief Legal Officer and Head of Regulatory Affairs
Dash Financial Technologies

Mr. Lacarrubba advises broker-dealers, hedge funds, and other financial institutions on matters arising under the rules of the SEC, CFTC, and various self-regulatory organizations, including the Financial Industry Regulatory Authority (FINRA), the National Futures Association (NFA), and various securities and futures exchanges. He focuses on a wide range of regulatory issues affecting financial services firms, including equity and futures trading practices, alternative trading system regulation, best execution practices and compliance with Regulation SHO, Regulation M, Regulation NMS, and the Market Access Rule.

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Eden L. Rohrer
Of Counsel
McIntyre & Lemon, PLLC

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.   

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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

    Tuesday, July 8, 2025

  • schedule

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

I. Securities laws applicable to activities of unregistered broker-dealers

II. SEC rulemaking in this area and the Fifth Circuit’s decision vacating the rules

III. Implications of the court's decision and vacation of the rules

IV. Finders under various states' laws

V. Finder-related exemptions

VI. Regulatory enforcement actions

VII. Practitioner pointers and key takeaways

Derek N. Lacarrubba, Partner at K&L Gates and Eden L. Rohrer, Of Counsel at McIntyre & Lemon, 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
  • Permissible activities for finders and unregistered brokers
  • SEC enforcement against unregistered dealers
  • SEC broker-dealer enforcement cases in the cryptocurrency industry
  • The status of the SEC's amendments to the dealer rule
  • Practitioner pointers and key takeaways