SEC Passes Equity Crowdfunding Rules-A Boon For BDs?

brokerdealers crowdfunding

Will New Regs Create A Boon For BDs?  Brother, Can You Raise $1mil?

(–If only coincident to the Halloween Trick or Treat Holiday, it’s now official, on Friday Oct 30 the US Securities & Exchange Commission (SEC) passed new equity crowdfund regs, opening the path to what some believe will be a multi-billion dollar tidal wave of startup funding, and also, what more cautious experts believe could be an entirely new cycle of speculative investing by unsophisticated investors. The new rules approved will make it easier for start-ups to sell shares directly to the masses. Brother, can you spare $1million?

They could also be big business for a broad universe of broker-dealers, as well as handful of Los Angeles firms (among many others) that want to act as the stock exchanges where these deals will take place.

The rules, which will take effect in about six months, allow private companies to raise up to $1 million a year from small-time investors without most of the reporting and auditing required of larger firms or companies raising more money.

For the entire story from, please click here



FINRA Chief Honcho Calls It Quits

FINRA Chairman Richard Ketchum

FINRA CEO Richard Ketchum will retire from the brokerdealer industry’s self-regulatory organization by the latter part of next year.

According to coverage from, FINRA’s board of governors is expected to look internally and externally for a successor.

Ketchum has been a critic of the Department of Labor’s proposal for a fiduciary standard for the wealth management industry. In May, he warned that the proposal comes with inadequate guidance to help firms navigate conflicts and ensure that they are engaging in appropriate compensation models when serving retirement plans or individual investors. maintains the global financial industry’s most comprehensive database of broker-dealers operating in more than 30 countries across the world.

Ketchum, 64, came to FINRA in 2009 from the New York Stock Exchange, where he was CEO of NYSE Regulation, and in the aftermath of the financial crisis. The industry veteran’s career includes 14 years with the SEC, where he was director of the Division of Market Regulation for more than half of his tenure with the agency.

“He worked tirelessly to protect and educate investors while also improving the integrity of the markets,” SEC Chairwoman Mary Jo White said. “Investors are better protected and our markets are stronger because of Rick Ketchum.” Ketchum continues to serve as a member of the SEC’s Market Structure Advisory Committee.

FINRA’s lead governor, Jack Brennan, praised Ketchum “as a champion of initiatives such as the High Risk Broker program, improvements in BrokerCheck, the expansion of TRACE reporting of asset-backed securities, and the expansion of FINRA’s responsibilities across stock and options trading.”

During his tenure at FINRA, Ketchum said in a statement that the organization’s accomplishments were based on a “commitment to excellence in our core competencies: examinations, enforcement, rulemaking, market transparency and market surveillance.”

“Investor protection is our principal reason for being, and I have been honored to work with an incredibly dedicated and talented group of professionals who take this vital mission seriously,” he said.

SIFMA CEO Kenneth Bentsen Jr. said Ketchum was at the forefront of every major milestone in the evolution of the U.S. securities markets over the last 40 years. “He has made his mark in ensuring a robust, efficient and pro-investor marketplace, and we wish him all the best in his retirement,” Bentsen said.

SEC Slated To Issue New Crowdfunding Guidance

SEC rules

SEC Title III-New Rules For Equity Crowdfunding To Be Announced This Week

SEC Title III from the US SEC, which addresses the regulatory issues pertaining to equity crowdfunding is slated to be finalized this week and industry publication Law360 has published the second of a series of articles that provides those seeking to raise money via crowdfunding platforms with solid guidance.

Law360, New York (October 28, 2015, 9:59 PM ET) — With the U.S. Securities and Exchange Commission set to finalize long-awaited rules for equity crowdfunding Friday, attorneys need to be prepared for how to navigate the new regulations in order to keep the SEC from breathing down their clients’ necks.

Crowdfunding, which allows small companies to raise money from ordinary people, has been a growing industry that thus far hasn’t seen much regulation — Friday’s rules will come about three and a half years after Congress requested them as part of the Jumpstart Our Business Startups Act.

For the full article, please click here

Citigroup Salutes Veteran-Owned BrokerDealers

citigroup salutes veteran-owned brokerdealers

In advance of this year’s Veteran’s Day (Wed, Nov 11), salutes Citigroup for its salute to veteran-owned brokerdealers. Citigroup (NYSE:C), is not only one of the world’s leading investment banks, it is also one of the financial industry’s most focused firms when it comes to diversity and inclusion. Citi’s leadership is long recognized for its corporate philosophy that strives to create good will among employees and respect of clients through initiatives that advance job creation and improving standard of living. In that spirit, Citi announced that it worked exclusively with veteran-owned brokerdealer firms to syndicate a recent $1.5 billion bond issuance, clearly showing Citi’s commitment to providing opportunities to the veterans’ community.

In the transaction, which priced on October 23, Citi hired five veteran-owned financial firms to distribute the bonds to investors. The firms comprised Academy Securities, Inc.; CAVU Securities, LLC; Drexel Hamilton, LLC; Mischler Financial Group, Inc.; and Multi-Bank Securities, Inc.

“Citi is proud to support our nation’s veterans and to partner with these firms, all of which executed with excellence and assisted us deliver a very successful transaction,” said Suni Harford, Citi’s Regional Head of Markets for North America. “This deal provides a great example of how companies can partner with veteran-owned businesses to provide opportunities for them to grow and succeed.” hosts the global financial industry’s most comprehensive database of broker-dealer firms, including comprehensive information for brokerdealers operating in more than 30 countries across the free world

Through the October 23 deal, Citi re-opened a $2 billion issuance originally priced in September, pricing $1.5 billion in additional bonds and bringing the total outstanding securities to $3.5 billion. Investors responded positively to the deal, which Citi hopes will be the first of similar transactions involving veteran-owned firms in the future.

Citigroup Inc., a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Global Consumer Banking (GCB) and Institutional Clients Group (ICG).


Fidelity Brokerage Arm Is Broken Says Regulator

Fidelity Brokerage Services was charged in an administrative complaint by State of Massachusetts’s  top securities cop Thomas Galvin with “dishonest and unethical behavior” for allowing unregistered investment advisers to make trades through the Fidelity broker-dealer platform, thereby generating fees for both the firm and the unregistered advisers.

At least 13 unregistered Massachusetts investment advisers used Fidelity’s platform, according to a statement from secretary of the commonwealth William Galvin.

For those advisers, “Fidelity served as a haven from regulatory oversight as it ignored blatant unregistered investment advisory activity,” according to a statement from Mr. Galvin’s office.

“We do not believe that Fidelity has violated any laws or regulations in connection with this matter,” said Adam Banker, a Fidelity spokesman. “We look forward to reviewing the details of this matter and addressing them appropriately.”

“Fidelity, of all companies, knows full well the range of investor protection provisions resulting from regulatory oversight,” Mr. Galvin said in the statement. “For them to knowingly allow unregistered activity on their broker-dealer platform is a profound failure of their regulatory obligations.”

In one instance, more than 20 Fidelity customers paid one unregistered investment adviser who was trading on their behalf $732,000 in advisory fees over a 10-year period, according to the complaint. The complaint alleges that Fidelity had knowledge that the individual was acting as an adviser during that entire period and encouraged his trading activity by providing the purported adviser, who made thousands of trades in the accounts of his clients, with gifts such as frequent flyer miles and tickets to a professional sporting event.

Fidelity had policies in place since 2011 that specified red flag risk warnings for certain levels of third-party trading, but those were ignored until recently, according to the statement from Mr. Galvin.