Alonzo Llorens and Olivia Daly wrote an article in Crowdfund Insider about an issue that has frustrated startups, tech companies, and others in the business community for years: whether "finders" who help companies raise money are violating securities laws.
"The U.S. Securities and Exchange Commission (SEC) published a proposed conditional exemption for finders on October 7, 2020," Alonzo and Olivia wrote. "Under the proposal, people (i.e., finders) seeking to assist companies or issuers in raising capital – for a fee – will have a non-exclusive safe-harbor from the broker-dealer registration requirement under Section 15(a) of the Securities Exchange Act of 1934, as amended."
"Since then, however, a new U.S. president has brought in a new leadership team, and the SEC has received a mix of positive and negative comments with respect to the proposal," they continued. "How Biden’s recently confirmed SEC Chair Gary Gensler approaches the proposal is a key issue to watch in the coming months."
You can read their analysis of the proposal and what SEC staff are currently saying about it here: Finders: Is the SEC Finally Ready to Clarify this Cloudy Issue for Startups and Other Private Companies?
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