Planet Fitness Sprints to Stock Markets

Posted on June 23, 2015June 23, 2015 by admin

Brokerdealer.com updates that Planet Fitness began a sprint toward the stock markets on Monday, filing for an initial public offering roughly two years after allying itself with a private equity firm.

Planet Fitness Inc. filed for an initial public offering to raise up to $100 million. With its filing, Planet Fitness, a low-cost gym chain, aims to become a publicly traded company in two months or so.

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Founded in its current form in 1992, the company was a pioneer in opening low-cost gyms meant to be friendlier to the average consumer rather than catering to hard-core fitness enthusiasts.Such was the company’s success that it eventually drew in as a partner the private equity firm TSG Consumer Partners, a specialist in consumer brands.

Last year, Planet Fitness reported $37.3 million in profit on $279.8 million in revenue, both up from a year earlier. In the prospectus, Planet Fitness listed a preliminary $100 million fund-raising target, a figure meant to determine listing fees.

It will eventually trade on the New York Stock Exchange under the ticker symbol PLNT.

Hong Kong Now Top 2 in IPOs

Posted on June 21, 2015June 21, 2015 by admin

The current hot market for IPOs (initial public offerings) now finds Hong Kong surpassing New York, and merely a few ticks below front-runner Shanghai for being the hottest centers for companies selling shares in new issue underwritings, according to the WSJ.

Red Star Macalline Group Corp priced its IPO in Hong Kong at the top of the range on June 19, raising HK$7.22bn ($931.34m) for the furniture retailer-cum-shopping mall owner that has been dubbed China’s answer to Ikea.

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The offering continues Hong Kong’s strong run as an IPO venue thanks to a stock-market boom. So far this year, Hong Kong ranks second globally as a venue for IPOs by value, behind Shanghai and ahead of New York, according to data from Dealogic.

The company secured US$330 million in orders from cornerstone investors, who agreed to buy and hold the shares for six months, including New York-based hedge fund Falcon Edge Capital, household appliances maker Gree Electric Appliances Inc., Shandong state-owned Asset Investment Holdings, China National Building Material and hedge fund BosValen Asset Management. It is scheduled to begin trading in Hong Kong on June 26.

If Legend’s listing takes place, it would be the year’s third-largest in Hong Kong after a US$4.5 billion listing by Chinese brokerage firm HTSC, better known as Huatai Securities, in May, and a US$4.1 billion IPO by GF Securities Co. in March.

To read the full article, click here.

SEC Bags 3 Dozen BrokerDealers in Muni Bond Underwriter Sweep; Siebert & Loop Snagged

Posted on June 21, 2015June 21, 2015 by admin

BrokerDealer.com profiles what could be called a “Muni Day Massacre” as the SEC just announced settlement with 36 municipal bond underwriting firms – for a total of $9.3 million– for offerings which they disclosed under the MCDC had compliance violations. The SEC sweep scooped up several MWBE-certified firms, including Siebert Brandford Shank & Co., LLC, which was fined $240,000 and Chicago-based Loop Capital Markets, LLC was fined $60,000.

Here is the official press release from the SEC:

June 18 2015–The Securities and Exchange Commission today announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings. The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.

“The MCDC initiative has already resulted in significant improvements to the municipal securities market, including heightened awareness of issuers’ disclosure obligations and enhanced disclosure policies and procedures,” said SEC Chair Mary Jo White. “This ongoing enforcement initiative will continue to bring lasting changes to the municipal securities markets for the benefit of investors.”

In today’s actions, the SEC alleged that between 2010 and 2014 the 36 firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with continuing disclosure obligations. The underwriting firms also allegedly failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their

“The settlements announced today reflect these underwriters’ cooperation in self-reporting their own misconduct and agreeing to improve their procedures going forward,” said LeeAnn Ghazil Gaunt, Chief of the Enforcement Division’s Municipal Securities and Public Pensions Unit. “Because these 36 firms underwrite a substantial portion of the country’s municipal bonds each year, we expect a large number of bondholders will benefit from the resulting improvements in due diligence and disclosure.”

As still remains customary within the wacky regulatory scheme in which the SEC deals with broker-dealers, the 36 firms did not admit or deny the findings, but agreed to cease and desist from such violations in the future. Under the terms of the MCDC initiative, they will pay civil penalties based on the number and size of the fraudulent offerings identified, up to a cap based on the size of the firm. The maximum penalty imposed is $500,000. In addition, each firm agreed to retain an independent consultant to review its policies and procedures on due diligence for municipal securities underwriting.

The MCDC initiative, which is continuing, is being coordinated by Kevin Guerrero of the Enforcement Division’s Municipal Securities and Public Pensions Unit. * * *

Link to the SEC’s orders and penalty amounts:

The Baker Group, LP – $250,000
B.C. Ziegler and Company – $250,000
Benchmark Securities, LLC – $100,000
Bernardi Securities, Inc. – $100,000
BMO Capital Markets GKST Inc. – $250,000
BNY Mellon Capital Markets, LLC – $120,000
BOSC, Inc. – $250,000
Central States Capital Markets, LLC – $60,000
Citigroup Global Markets Inc. – $500,000
City Securities Corporation – $250,000
Davenport & Company LLC – $80,000
Dougherty & Co. LLC – $250,000
First National Capital Markets, Inc. – $100,000
George K. Baum & Company – $250,000
Goldman, Sachs & Co. – $500,000
Hutchinson, Shockey, Erley & Co. – $220,000
J.P. Morgan Securities LLC – $500,000
L.J. Hart and Company – $100,000
Loop Capital Markets, LLC – $60,000
Martin Nelson & Co., Inc. – $100,000
Merchant Capital, L.L.C. – $100,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated – $500,000
Morgan Stanley & Co. LLC – $500,000
The Northern Trust Company – $60,000
Oppenheimer & Co. Inc. – $400,000
Piper Jaffray & Co. – $500,000
Raymond James & Associates, Inc. – $500,000
RBC Capital Markets, LLC – $500,000
Robert W. Baird & Co. Incorporated – $500,000
Siebert Brandford Shank & Co., LLC – $240,000
Smith Hayes Financial Services Corporation – $40,000
Stephens Inc. – $400,000
Sterne, Agee & Leach, Inc. – $80,000
Stifel, Nicolaus & Company, Inc. – $500,000
Wells Nelson & Associates, LLC – $100,000
William Blair & Co., L.L.C. – $80,000

Under ‘Reg A’, Firms Ready to Raise Up to $50 mil

Posted on June 18, 2015June 18, 2015 by admin

Brokerdealer.com profiles that some entrepreneurs and business owners say they’re preparing to raise up to $50 million in capital from investors, without facing the legal costs and financial reporting requirements of going public, taking advantage of Reg A that kicks in Friday.

The rules stem from the 2012 JOBS Act, which was established to help fledgling companies raise capital to expand and create jobs. As of Friday, the rules raise the cap on the amount of equity a business can issue privately, under what’s known as “Reg A” to $50 million, from $5 million.

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In addition, they do away with a requirement for businesses raising more than $20 million to pay separate fees and file paperwork to the federal Securities and Exchange Commission, as well as regulators in every state where investors purchase shares. The offerings are open to mom-and-pop investors.

To find out how some small firms are looking forward to this new rule, read this WSJ article.

Wells Fargo Accused of ‘Due-Diligence’

Posted on June 17, 2015 by admin

A Wells Fargo Advisors client has asked arbitrators to recover money he says he lost investing with F-Squared Investments Inc., his lawyer said Wednesday, testing whether investors can challenge brokerage firms who sold the troubled asset manager’s products.

F-Squared agreed in December to pay $35 million to settle charges it made false claims about the performance of its flagship investment product. Now, an investor is demanding at least $100,000 in damages from Wells Fargo in a claim filed on Monday.

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If the case is successful, it will be the first major legal repercussion for a broker-dealer whose advisers sold F-Squared products. Wells Fargo first made F-Squared managed accounts available to its corps of 15,000 advisers in mid 2013. A Wells Fargo spokeswoman, Rachelle Rowe, declined to comment.