The Broker Trap: When Networking Goes Bad

more+
less-

The truism “it’s not what you know, it’s who you know” sums up the availability of capital for most businesses. Networking is often essential to the survival of small businesses looking for money or an exit plan through a merger or acquisition. In fact, some small businesses hire attorneys, accountants and investment professionals (“Advisers”) based on their seeming ability to provide this nexus to capital. For their part, Advisers often want to play this matchmaking role to help their client succeed, especially if success results in the Adviser’s bill being paid. But when does networking cross the line from being a successful business strategy to being a violation of the securities laws? According to the Securities and Exchange Commission’s (the “SEC”) sweepingly broad definitions, it can be a slippery slope from being an accommodating advocate to an unregistered broker-dealer.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

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.

© Christine McKillip, Chapman and Cutler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×