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Using an Unregistered Broker-Dealer for Capital Raising is a Risky Proposition | DarrowEverett LLP jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
On October 7, 2020, the Securities and Exchange Commission (the "SEC") issued a Proposed Order ("Proposal") to establish exemptions from the broker registration requirements for certain Finder activities (the "Proposal"). ....
Finders: Is the SEC Finally Ready to Clarify this Cloudy Issue for Startups and Other Private Companies?
In an effort to address an issue that has frustrated the business community for years, including startups, tech companies, and “finders,” the U.S. Securities and Exchange Commission (SEC) published a proposed conditional exemption for finders on October 7, 2020. Under the proposal, people (i.e., finders) seeking to assist companies or issuers in raising capital – for a fee – will have a non-exclusive safe-harbor from the broker-dealer registration requirement under Section 15(a) of the Securities Exchange Act of 1934, as amended. Since then, however, a new U.S. president has brought in a new leadership team, and the SEC has received a mix of positive and negative comments with respect to the proposal. How Biden’s recently confirmed SEC Chair ....
To embed, copy and paste the code into your website or blog: In an industry already rife with significant regulatory complexities, cannabis issuers face another challenge familiar to many small and emerging businesses raising capital: The regulatory minefield posed by hiring unregistered broker-dealers, also known as “finders,” to assist issuers with raising capital in private markets from accredited investors. This is particularly true for the capital raising ecosystem within the cannabis space, which, due to its federal illegality among other factors, lacks the type of established, robust capital raising networks available to other, more traditional industries. This post is the first of two installments of a “mini-series” discussing the potential impact of the SEC’s proposed limited conditional “finder” exemptions on issuers’ capital raising efforts. ....