Fiduciary Governance Blog

June 25 Webinar: Finders and Unregistered Broker-Dealers: Understanding the Risks and Recent Developments

Larry Stadulis and Peter Hong will be participating in a Strafford webinar on June 25 @ 1 pm EDT. Registration information can be found here. Here is a description:

Historically, the SEC has been aggressive in bringing enforcement actions against those involved in transactions with unregistered broker-dealers and those that fail to register as broker-dealers – most recently in several cases alleging unregistered dealer activity. The SEC continues to impose sanctions on private equity firms and managers for using unregistered broker-dealers. The SEC is also carefully scrutinizing unregistered broker-dealer issues in its OCIE compliance exams of private investment funds.

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.

The SEC has 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.

Peter M. Hong, Partner at Stradley Ronon Stevens & Young; Eden L. Rohrer, Partner at K&L Gates and Lawrence P. Stadulis, Co-Chair, Fiduciary Governance at Stradley Ronon Stevens & Young, 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. The panel will also discuss the SEC’s focus on broker-dealer issues in the private fund market, the ICO market, as well as the online crowdfunding portal space, and recent enforcement actions.

The panel will review these and other key issues:

  • 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’s and FINRA’s guidance on finder activities in the M&A arena inform the permissible activities of finders in the securities and fund arenas?

For more information >

Or call 1-800-926-7926
Ask for Use of Unregistered Finders to Solicit Investors on 6/25/2020
Mention code: UL5ST4-47UJAY

Jay Clayton to speak on ESG June 23

As announced by the SEC:

A Conversation with SEC Chairman Jay Clayton: Long-term Investing, Sustainability, and the Role of Disclosures – June 23, 2020 | 12:00 pm EDT

FCLT Global will host a virtual conversation with SEC Chairman Jay Clayton and Mark Wiseman, hosted by Sarah Williamson, CEO of FCLTGlobal. This informal interview will center around the Chairman’s views on the importance and role of such disclosures and provide thoughts on how companies, investors, and standard-setters can clarify and advance the development of appropriate disclosures. Questions may be submitted in advance to or via the registration form.

Registration Link: