Indian Startups Gather Interest and Venture Funding From BrokerDealers Everywhere

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Brokerdealer.com blog update profiles  Indian start up companies collecting interest from brokerdealers around the world for comapny funding. This brokerdealer.com blog update is courtesy of Wall Street Journal’s article, “Venture Money Floods Into Indian Startups “.

Vikram Chopra spent the past three years building an online furniture-shopping site for Indian consumers that was funded mainly by annual capital injections from a German technology incubator.

But during the past few months, investor interest in the site, FabFurnish.com, has soared, said the 32-year-old entrepreneur, who is based in the New Delhi suburb of Gurgaon. Several global venture-capital firms and hedge funds have said they are interested in investing, and Mr. Chopra is now considering another round of funding that would exceed the $20 million raised so far—even though he doesn’t expect FabFurnish to be profitable for another two years and doesn’t yet need the cash.

“A few years ago, everybody wanted to see profitability upfront,” said Mr. Chopra. “Today, it is more like how much money you need to curb the competition [and] kill everyone else.”

Global money is flooding into Indian startups as investors search for a successor to Alibaba Group Holding Ltd., the Chinese e-commerce company that raised a record $25 billion in its initial public offering last year.

To read the entire article from the Wall Street Journal, click here.

BrokerDealer Profile: StartUps Embrace “SAFE” Approach For Investors

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Vinayak Ranade, the founder of Drafted. Photo: M. Scott Brauer for The Wall Street Journal

BrokerDealer.com blog profiles a new investment document approach for Startups seeking capital from angel investors and others; courtesy of 2 April coverage by WSJ’s Adam Janofsky and Angus Loten “Startups Offer Unusual Reward for Investing; Simple Agreement for Future Equity aka “SAFE.”

When a young Boston entrepreneur sought half-a-million dollars to launch his startup last fall, he turned his back on today’s usual tactics, such as selling equity stakes or issuing convertible notes.

BrokerDealer.com global database can link you to angel investors and qualified brokerdealers

Instead, Vinayak Ranade opted to use a largely untested way for entrepreneurs to raise funds known as a Simple Agreement for Future Equity.

The agreement provided investors in Drafted Inc., Mr. Ranade’s fledging, four-employee company, no equity shares, and the investors weren’t categorized as creditors. Continue reading →

BrokerDealer Crime Beat-Brokerage Execs Plead Guilty in Bond Bribery Deal

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Brokerdealer.com blog update profiles brokerdealer firm, Direct Access Partners, pleading guilty after a scheme to bribe an offical at a Venezuelan development bank for more business. This update is courtesy of Traders Magazine article, “Former Direct Access Partners Execs Sentenced in Bribery Scheme“, with an excerpt below.

Two former top executives with institutional brokerage Direct Access Partners, a firm that shut down in December of 2013 after its clearing firm, Goldman Sachs, stopped clearing its trades, have opted to plead guilty for indiscretions regarding its bond trading business.

DAP’s former chief executive, Benito Chinea, and former managing director, Joseph Demeneses, each pleaded guilty one count of conspiracy to violate the FCPA and the Travel Act in connection with a scheme to bribe an official at a Venezuelan development bank, Banco de Desarollo Economico y Social de Venezuela (BANDES), in exchange for the official’s directing BANDES’ trading business to DAP.

Chinea, of Manalapan, New Jersey, and Joseph DeMeneses, of Fairfield, Connecticut, were each sentenced to four years in prison. They were also ordered to pay $3,636,432 and $2,670,612 in forfeiture, respectively, which amounts represent their earnings from the bribery scheme.

“These Wall Street executives orchestrated a massive bribery scheme with a corrupt official in Venezuela to illegally secure tens of millions of dollars in business for their firm,” Assistant Attorney General Caldwell said in a media statement. “The convictions and prison sentences of the CEO and Managing Director of a sophisticated Wall Street broker-dealer demonstrate that the Department of Justice will hold individuals accountable for violations of the FCPA and will pursue executives no matter where they are on the corporate ladder.”

Three other DAP employees and the BANDES official pleaded guilty last year for their participation in the bond trading matter.

DAP itself filed for bankruptcy.

New York-based Direct Access Partners started out in 2002 as a New York Stock Exchange floor brokerage and grew rapidly over the years in both equities and fixed income. Sources tell Traders the firm has 130 employees.

To read the entire article from Traders Magazine, click here.

BrokerDealers Beware: Don’t Blab, Not Even on SnapChat

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Lots has been said about bankers and broker-dealers blabbering via social media. The topic has helped to create plenty of compliance department angst across the brokerdealer universe. Now, thanks to the latest DealBreaker snapshot, one that also provides free advertising for social media app SnapChat, the folks here at BrokerDealer.com remind our industry audience: Think twice before you hit the ‘send’ or ‘publish’ button.

The chairman of Royal Bank of Scotland’s investment bank is leaving just weeks after messages he sent to his daughter were revealed, showing he was “bored” at work. Rory Cullinan, the RBS capo used photo-sharing app Snapchat to send images featuring captions that read: “Not a fan of board meetings xx”, “Boring meeting xx” and “Another friggin meeting”. The pictures then ended up being posted on Instagram around Father’s Day last year by the investment banker’s daughter, but only revealed in a national newspaper early this month. Mr Cullinan’s daughter had uploaded the photos with the message: “Happy Father’s Day to the indisputable king of Snapchat.” Mr Cullinan drew heavy criticism for not taking his role seriously.

For the full story, please visit DealBreaker.com

Are You A Fiduciary? SEC’s Attempts to Create More Distinction

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Brokerdealer.com blog update profiles the financial industry is bubbling thanks to SEC effort to redefine terminology and specifically, who it applies. In this case, the confusion comes in with who is a fiduciary and who isn’t.  This blog update is courtesy of The Philadelphia Inquirer columnist, Erin Arvedlund. The excerpt below comes from both Arvedlund’s blog and her Monday column, “Monday Money Tip: Beware financial advisers who are not fiduciaries“.

arvedlund-150x150Before you sign on with a money manager, ask: Are you a fiduciary? If yes, great. If not, go in with your eyes open.

Fiduciaries, by law, have to do the right thing by their clients. No one on Wall Street wants, by law, to have to do the right thing.

Some street professionals are fiduciaries; registered investment advisers generally are, brokers are not.

And the distinction grows every day.

Anyone whose job is to raise sales cannot meet the fiduciary standard, notes Knut Rostad, president of the Institute for the Fiduciary Standard.

“Brokers may provide useful product recommendations, but they cannot meet the fiduciary standard,” Rostad says.

“They can no more provide objective advice about investments than can the Ford car salesman objectively advise on cars. They may be terrific people but, by virtue of what they do, they will most assuredly provide terrible advice.”

The issue is confusing, and Wall Street wants to keep it that way.

Read the entire article from the The Philadelphia Inquirer, here, and for more financial commentary, click here for Erin Arvedlund’s blog.