Making Marijuana Public; Capital Raising Conundrum:Pot Dealers’ BrokerDealers Test SEC On Registration of Scofflaw Shares blog update courtesy of extract from Oct 30 WSJ Risk & Compliance column by Greg Millman.

Two businesses that explicitly state they intend to cultivate and sell marijuana are hoping the Securities and Exchange Commission will soon clear their applications to register shares. Or not.

The SEC’S response to S-1 filings by Terra Tech Corp. and GrowBlox  Sciences Inc., initiated in August and September, respectively, could show whether the agency is willing to accelerate the registration of shares of businesses that say they intend to break Federal law.

pot king

Derek Peterson, CEO Terra Tech

Both Terra Tech and GrowBlox are now pursuing the S-1 registration process because of contractual commitments to providers of capital who received convertible debt and/or warrants, according to their S-1 forms. SEC registration would allow the holders to sell their securities without meeting the conditions of Rule 144A, which “allows public resale of restricted or control securities” only after a holding period before the sale, and other conditions.

Although marijuana use has been legalized by  20 states, according to the Office of National Drug Control Policy, it remains illegal at the federal level.

Terra Tech’s  board made a decision “earlier this year” to compete for permits to cultivate and sell marijuana in states that have such permitting regimes, according to Chief Executive Derek Peterson. The company previously filed two S-1s in 2013. While they were in process, the SEC asked whether the company’s business model violated federal law, and “we responded that were just selling equipment at that point. They were comfortable with that at the time,” said Mr. Peterson. On both of those S-1s, the SEC responded favorably to Terra Tech’s request to accelerate, that is, to allow the filings to become effective without a waiting period.

For the full article from the WSJ, please click here

Israel-based Deal Activity Inspires Bankers & BrokerDealers blog update courtesy of extract from Oct 27 edition of

Investing in Israel: More Than Technology

marketsmedia logoWhen it comes to investing in Israel, technology is a big part of the story, but it isn’t the only story, according to Steven Schoenfeld, chief investment officer of BlueStar Global Investors.

“Israel is actually a multifaceted story,” Schoenfeld said last week in a panel discussion on the TA-25 Index. “Israel’s tech economy, particularly with the publication of the book Start-up Nation, is the sexier part of Israel, and especially because you see so many of those tech companies coming to list in the New York, that’s a big part of the economy. But, in fact, even if you include all of those tech companies, it’s only about 30 to 35% of Israel’s market cap.”

BlueStar specializes in the Israeli capital markets. Its mission is to develop investment strategies that provide global institutional and retail investors efficient access to the full range of Israeli asset classes.

Its flagship product is the BlueStar Israel Global Index, a benchmark designed for providing balanced sector exposure to Israel’s dynamic economy. The index is designed to serve as an asset allocation tool, a performance benchmark, and the basis for investment products. Continue reading

Former Boss of Bosses For BrokerDealers Joins Bitcoin Bandwagon; Ex-SEC Head Arthur Levitt Is on Board blog update courtesy of reporting from WSJ and other news outlets

Arthur Levitt, the longest-serving chairman of the Securities and Exchange Commission, is joining the advisory boards of two bitcoin-focused companies.

Frmer SEC Head Arthur Levitt, photo by Reuters

Frmer SEC Head Arthur Levitt, photo by Reuters

As an adviser to Atlanta-based BitPay, a bitcoin payment processor, and Vaurum, a Palo Alto-based bitcoin exchange for institutional investors, Mr. Levitt says he hopes to “help them understand the imperative of a robust approach to regulation” if bitcoin is to fulfill its promise to further shake up the world of finance. The appointments will be formally announced Tuesday.

Bitcoin is an independent digital currency in which transactions are verified by a network of computer owners and a universal payments ledger. The model strips out banks, credit card companies and other intermediary institutions from electronic payments and so aims to reduce costs in the system.

Mr. Levitt, who ran the SEC between 1993 and 2001 and who these days works in a variety of consulting roles, is one of the highest-profile members of the U.S. financial establishment to work in the digital-currency industry. In an interview, he said he was drawn to the sector by the innovative energy of the young people behind it, a group that he described as always “thinking beyond the box.”

“The intellectual firepower behind [bitcoin] enterprises is astonishing,” Mr. Levitt said. “But I think in terms of compliance and regulations, they are relatively immature.”

He said bitcoin needs regulation to build the trust of the broader population and boost adoption. Bitcoin firms “must have as their top priority a greater public understanding of what bitcoin is, how it works” and of the improvement it brings by “imposing competitiveness on establishment practices and procedures,” he added.

The BitPay and Vaurum appointments come at a crucial time for bitcoin. After it rallied 9100% against the dollar in the 12 months to December 2013, its price has since fallen by 70% from that peak, in part because of regulatory uncertainty.

From Russia With Love: BrokerDealer and Banker to Russia Billionaires

Andrey Akimov, photo courtesy of Simon Dawson/Bloomberg LP

Andrey Akimov, photo courtesy of Simon Dawson/Bloomberg LP blog update courtesy of extract from 24 Oct Bloomberg LP coverage by reporters Irina Reznik and Anna Baraulina

When he’s not cruising the streets of Austria in his gray Tesla Model S, Andrey Akimov can often be found behind a desk on the seventh floor of a nondescript office building just across the Moskva River from the Kremlin.

Two bullet-proof doors and one small sign are the only clues that this is the control center of a financier who’s helped turn some of Vladimir Putin’s closest allies into multibillionaires. For a man who honed his trade in the hushed back rooms of Vienna and Zurich during the Cold War and who is now, as friends say, the most secretive banker in a country run by a former spy, this is how it should be.

While Akimov, 61, hasn’t avoided sanctions against the lender he’s run for a dozen years, state-controlled OAO Gazprombank, Russia’s third largest, he has not been singled out personally. By contrast, billionaire Yuri Kovalchuk, the largest shareholder of Bank Rossiya, the 16th biggest, was blacklisted by the U.S. in its first round of penalties over the Ukraine conflict in March for being what the Treasury called a “cashier” for Putin. Akimov, who’s never appeared on a global rich list, owns about 0.2 percent of the bank, equal to $1.7 million of shareholder equity, company filings show.

Power Broker

Akimov occupies a key position in Putin’s intricate power system and the fact that few people know it is a tribute to his skill as a behind-the-scenes broker, said UBS AG (UBSN) Russia Chairman Rair Simonyan, who has known Akimov for decades. Simonyan, 67, joined UBS in January, after running Morgan Stanley (MS)’s Moscow office for 14 years and working as an adviser for eight months to OAO Rosneft (ROSN) Chief Executive Officer Igor Sechin, who was added to the U.S. blacklist in April.

“Andrey is able to maintain professional relationships with everyone in Putin’s inner circle and beyond, even though some of them won’t even talk to each other,” Simonyan said in an interview in Moscow. “These people accept his mediation, regardless of their attitudes toward each other.”

Akimov, a fluent speaker of English and, like Putin, German, has never given a media interview, according to Gazprombank’s press service. Putin’s spokesman, Dmitry Peskov, declined to comment on the president’s relationship with Akimov.

“Andrey is a very, very secretive man, even for a banker,” Simonyan said. “And Gazprombank is a very Russian bank. Foreigners wouldn’t understand it.”

When Akimov took over Gazprombank in 2002, it was little more than a “piggy bank” for managers of the world’s largest gas producer, with less than $3.8 billion of assets, Simonyan said. Now it has $96 billion.

For the full article from Bloomberg LP, please click here

Former BrokerDealer Biz Dev Babe Charged With Sexual Harassment blog update courtesy of extract from muckracking outlet

According to lawsuits by two of her former subordinates, during her time as a senior vice-president and head of business development for North America, Eileen Hedges told another one of her subordinates, 27 year-old “Jane Doe,” to:

  • Dress provocatively on the job
  • “…have sex with male HSBC executives and clients at company-sponsored events”
  • Specifically, “have sex with an unnamed senior executive at the bank’s Mexico unit”
Eileen Hedges, Frmr SVP HSBC

Eileen Hedges, Frmr SVP HSBC

The boss of the year also allegedly:

  • “…falsely told co-workers that Doe was having sex with clients when they traveled to bank functions outside the U.S.”
  • “…told Doe about her own alleged extramarital affairs with HSBC executives.”1
  • “… attempted to pull down Doe’s blouse and expose her breasts in the presence of male HSBC employees.”

And the reason we now know all this is because, naturally, the subordinates who filed the lawsuits were (supposedly!) retaliated against by Hedges after complaining that her demeanor on the job was slightly less than professional.

For the full story, please visit