Program Description

Companies with cash needs routinely use intermediaries to assist in the capital raising process. Federal law broadly requires financial intermediaries to be registered as brokers with the Securities and Exchange Commission. “Finders” are unregistered placement agents, consultants or go-betweens who introduce businesses to prospective investors - and who sometimes engage in other activity. The legal status of finders is murky and they operate in a regulatory gray area. Companies that retain finders face potentially serious consequences for doing so, and finders face significant risks if they are deemed unregistered securities brokers. Marijuana-related businesses that engage finders, and unregistered intermediaries who source capital for those businesses, face additional risk because of federal prohibition. This 90-minute program will cover a range of topics that are important for companies and finders in the cannabis sector and their counsel, including: The federal regulatory scheme for broker-dealers; the current legal status of finders as developed through SEC staff no-action letters, enforcement proceedings and court decisions; the myriad risks associated with using and being an unlicensed intermediary; finder-related issues unique to the cannabis sector; and the SEC’s recent proposal to create a safe harbor exemption for finders. Although the focus of this program is federal law and the role of intermediaries in raising capital, state law issues and the topic of M&A finders will also be discussed..

Originally Recorded 2/19/21

View recording HERE