Finders Bill Finds Some Forward Transaction


Finders in securities transactions are common but their legal status is uncertain at best.  Last year, I wrote that Assembly Member Donald P. Wagner had introduced a bill, AB 713, to statutorily homologate the status of finders in California.  See Eureka! Bill Introduced To Homologate Finders.  The bill was set for hearing last April, but the author requested the hearing being cancelled.

On Monday, the legislature reconvened and one of the first items of business for the Assembly Banking and Finance Committee was consideration of AB 713.  The bill has been substantially amended and has been re-referred to the Committee.  The bill’s sponsor is the Corporations Committee of the Business Law Section of the California State Bar, which argues:

“The enactment of the proposal adds a modicum of certainty in connection with the engagement of finders in securities transactions.  This added certainty will benefit (a) the State of California via increased income tax revenues, (b) startup companies, and small to midsized business entities seeking access to the capital markets, and (c) individuals who have the capability”

Bill Analysis, Assembly Banking and Finance Committee (Jan. 6, 2014).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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