Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

If you are planning to move into the crowdfunding consulting or platform area make sure you are familiar with the SEC broker-dealer rules, which require registration before performing broker-dealer services.  If you plan on crowdfunding an equity offering, you want to make sure all of your service providers are properly licensed.  The SEC has commenced this enforcement action which makes the point that there is no pass for crowdfunders and that they will vigilantly enforce the broker-dealer rules as interpreted by the SEC.

Here are some examples of activities  the SEC believes the defendants in the enforcement action engaged in which are hallmarks of being a broker dealer:

  • structure the terms of proposed offerings;
  • prepare offering memoranda and registration statements;
  • help customers qualify to sell securities under Regulation A;
  • ensure proposed offerings comply with all applicable laws;
  • market the offered securities to potential investors, including registered investment advisers and venture capitalists;
  • identify and screen potential investors;
  • provide an online portal for investors to purchase customers’ securities;
  • handle investor payments online;
  • transfer and hold digital stock certificates;
  • purchase customers’ securities not sold to investors; and
  • provide a secondary market for customers’ securities.


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The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.