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.”

BrokerDealer.com 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).

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This is the single most common question I get asked. There’s a lot of misinformation about this, so let’s clear it up…

BrokerDealer.com hosts the world’s most comprehensive database of brokerdealers operating across 35 countries worldwide

Keep in mind that a “platform” is just a website. It’s NOT a business in and of itself (people often confuse a 506b/c or Reg A platform with a Title III “portal” as defined in the JOBS Act, and they are very differrent things). A platform is simply a tool for general solicitation. So you are not a platform, you are an issuer/investment adviser/listing service/broker-dealer who might have a website that lists offerings of securities, might use other websites that promote offerings of securities, might use social media to promote offerings of securities, might run newspaper ads to promote offerings of securities, might send emails to promote offerings of securities…you get the picture.

Platform Types:

There are four main types of businesses using platforms to market securities pursuant to 506-D (aka “Title II of the JOBS Act”) and Regulation A (“Title IV”):

• Broker-dealers
• Investment advisers
• Ad/listing services
• Direct Issuers

Which one are you? Well that depends upon your business model.

Broker-dealers can charge commissions based upon the amount and/or success of an offering. They can also make specific recommendations (not to be confused with “general solicitation”, which anyone can do in a 506(c) or Reg A offering whether registered or not). BD’s typically charge around 8%+ of an offering to cover costs associated with compliance, due diligence, sales commissions, etc. So if you want to charge, for example, an 8% commission on a $1M offering then you need to either be a FINRA member firm or a registered representative of one.

NOTE: only BD’s and registered representatives can receive commissions or success-based compensation. You CANNOT receive commissions as a rep and then hand those over to an unregistered person or company. This is a huge mistake we have heard many operators are making; getting someone in their firm registered so the BD can pay them, and then having them hand over those fees as income to the firm. Illegal. Games cannot be played with this (e.g. charging the rep a huge office rent) as regulators are wise to that and the results will not be pretty. So unless you intend to register every single person in your business, or to buy all or part of a broker-dealer, there is no way for you to receive any income tied to the amount or success of a securities offering.

Investment-advisers typically operate on a “2/20” model – meaning a 2% annual management fee on the assets resulting from the funds raised in the offering and an upside profit-share of 20% in the profits of the business/investment (referred to in securities lingo as “carried interest” – it’s called that as it’s your interest in the success of the venture, so don’t confuse it with interest-rate or a commission on the deal). This falls under the Investment Advisers Act of 1940. Thus, under this model it is not necessary (or advisable) to be a BD or a branch-office of one. Starting an IA is generally free as you are usually initially exempt from federal and state registration requirements due to de minimis exemptions. Even when you do hit the threshold for state or SEC registration, the costs are minuscule compared to those associated with operating a broker-dealer.

Ad/Listing services might charge a listing fee that is non-refundable and/or a fixed transaction fee for processing data and/or other types of fees which are not (and cannot be) contingent upon the success of the deal. Issuers come to the platform and agree to pay the ad or listing fees (if any) for displaying their offering. The platform focuses on marketing itself and providing general solicitation services to issuers who engage them. They get no compensation in the form of commissions, fund management fees or carried interest like broker-dealers or investment advisers do. Thus, under this model it is not necessary (or advisable) to be a BD or a branch-office of one.

Interesting: investment advisers and broker-dealers can post the offerings or deals they are selling on listing services platforms. Some such platforms are even aggregating (re-displaying) offerings which are displayed on other platforms. My next article will discuss various forms of syndication.

Issuer-Direct websites (platforms) are run by businesses (e.g. real estate developers, technology incubators and others) to solicit investors for their own deals, and as such don’t charge any fees at all. They are just platforms that list and advertise the offerings to prospective investors as allowed in 506-D and Reg A offerings. These platforms are not subject to any specific regulatory memberships or oversight, though of course the securities themselves still have to comply with the requirements of the Securities Act of 1933 (’33 Act), and the sale of those securities has to comply with each of the 50 “mini-SEC’s” state laws regarding securities dealers. Under this model it is not necessary (or advisable) to be a BD or a branch-office of one (but almost always necessary to engage one to “sell” your securities to states residents).

Why not just go ahead and operate as a broker-dealer even if you really don’t have to? Because unless you’re already a broker-dealer then your expertise is likely elsewhere, it’s not what you do, and the added burden of regulatory compliance can be debilitating to your business and to the offerings your promote; and registered representatives can’t share fees with non-registered persons anyhow. So stick with what you know, and hire other firms to do what they do.

But don’t offerings displayed on platforms have to be under the control of/underwritten by a broker-dealer? No.

So, is my business model legal? Here are a few guidelines…
If operating as an investment advisor, listing service or issuer direct - do not charge fees based upon the amount or success of the offering and don’t make specific investor recommendations (as opposed to general solicitation, which is fine). Engage a broker-dealer to assist you with various federal and state compliance tasks.
If you are operating as a broker-dealer – do not pay anyone (neither individuals nor businesses) any portion of the compensation you are receiving unless they too are registered and you have specific approval to do so from your broker-dealer.
But…as always…check with your securities attorney before you do anything.

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An activist hedge fund investor on Tuesday afternoon said it had taken a 6.3% stake in LPL Financial Holdings Inc., sending the independent broker-dealer’s stock price higher as the rest of the market declined.

LPL’s shares are undervalued, Marcato Capital Management said in a filing with the Securities and Exchange Commission. Marcato acquired the LPL shares through various funds it controls “in the belief that the shares are undervalued and are an attractive investment.”

Marcato could enter into discussions with LPL’s board to discuss “strategic alternatives” for the company, including a potential for a merger or acquisition, according to the filing.

BrokerDealer.com hosts a global directory and database of brokerdealers in more than 35 countries worldwide.

“These discussions may review options for enhancing shareholder value through strategic alternatives or operational or management initiatives including, but not limited to, improving capital structure and/or capital allocation, M&A, asset allocation, and general corporate strategies,” the company wrote in the filing.

The company’s share price has lagged since it reached a peak of $55.37 in March 2014. Its recent low was $37.72. The stock surged almost 4% after the Marcato filing with the SEC; in early afternoon trading in New York, LPL shares were trading around $41.80. The S&P 500 was down about 1.6% on Tuesday.

ONGOING DIALOG

“LPL Financial maintains an active and ongoing dialogue with its investors and values their input as we work toward the common goal of driving stockholder value,” an LPL spokesman, Brett Weinberg, said in an email.

When asked specifically about a potential merger for LPL, Mr. Weinberg declined to comment.

With close to 14,000 affiliated registered reps and investment advisers, LPL has had growing pains over the past few years. LPL has been in the spotlight recently due to its host of problems with the Financial Industry Regulatory Authority Inc., (FINRA) as well as state regulators. Two products that have caused LPL to pay fines or restitution to clients have been nontraded real estate investment trusts, a popular alternative investment, and variable annuities.

CEO Mark Casady said over the summer that LPL was near the finish line with fines and settlements stemming from securities regulators’ actions.

Alex Kramm, an analyst for UBS who follows LPL, said investment firms such as Marcato focus on why companies are undervalued.

For the entire story from InvestmentNews.com, please click here

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BrokerDealer.com is the host to the financial industry’s most comprehensive database of broker-dealers and provides information on brokerdealers across more than 30 countries worldwide.

According to the latest WSJ coverage, Symphony has won backing on Wall Street because it has been viewed as a potential lower cost alternative to a popular messaging service on Bloomberg LP’s terminals. The company has also made its encryption technology a key selling point for financial firms wary about sensitive data falling into the wrong hands.

The Palo Alto, Calif., company has secured $66 million in financing from 14 firms including Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co. and BlackRock Inc.

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BrokerDealer.com is home to the global market’s largest database of brokerdealers operating in more than 30 countries across the free world.

(Bloomberg) — Criminals always slip up. They leave behind fingerprints. Hair. A cigarette butt.

A telltale acronym.

TYOP (tell you on phone), TOL (talk offline) and LDL (let’s discuss live) are red flags for prosecutors combing through the e-mail transcripts of Wall Street traders suspected of illegal activity. No need for a crime lab. A simple search — Control-F on the computer keyboard — has become one of investigators’ favorite weapons to uncover possible lawbreaking, according to defense attorneys and current and former prosecutors who agreed to speak on condition of anonymity.

“Taking a conversation offline provides evidence of intent because if you’re trying to cover your tracks, you probably know what you’re doing is wrong,” said Eugene Ingoglia, a partner at Morvillo LLP and former assistant U.S. attorney for the Southern District of New York.

Phrases such as “call my cell” and “let’s go off e- mail” remain popular among the people who plot insider trades or the rigging of some of the world’s biggest markets. New expressions and acronyms pop up all the time, and authorities say they build lists of favored terms.

Evasion techniques can get creative. Raj Rajaratnam, the fund manager convicted in 2011 of insider trading, would write “fon” instead of “phone.” Prosecutors said they suspected the intentional misspelling was meant to distract the all-seeing electronic Javert of Control-F.

Suggestive Phrases

To continue reading the Bloomberg story re-distributed by TradersMagazine, please click here

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BrokerDealer.com provides the world’s largest database of registered brokerdealers and information on broker-dealers operating in more than thirty countries across the world

“We are grateful and honored to be named Broker-Dealer of the Year,” said Eric Schwartz, Cambridge Chairman and CEO. “We can only earn this honor if our advisors value our services and take time from their independent businesses to engage in this poll. It is quite humbling to be complimented by those we passionately serve.”

“Our purpose is to make a difference in the lives of our advisors, and being recognized as Broker-Dealer of the Year is an honor driven by our advisors,” said Amy Webber, Cambridge President. “As we strive to make a difference in the lives of our advisors, we believe together we can make a difference in the lives of their clients.

For the entire press release, please click here

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For a comprehensive list of brokerdealers across Hong Kong and surrounding regions, brokerdealer.com offers the most extensive down-loadable directory of licensed broker-dealers

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