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Category Archives: Private Placements

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So You Think You Want To Invest in Medical Marijuana

Posted in Financial Industry Trends, Private Placements

By most recent estimates, the medical marijuana business is generating at least $4.5 billion a year in revenue. Naturally, many people want to cultivate their own opportunities in this ever growing business. Now that Pennsylvania has become the latest state to authorize medical marijuana, many people will look to invest in this industry. Some businesses… Continue Reading

What FINRA Is Doing About Private Placements

Posted in Broker-Dealer Regulation, Financial Industry Trends, FINRA Compliance, Private Placements

FINRA recently censured and fined a broker-dealer $175,000.00 for failing to perform appropriate due diligence and supervision regarding private placements that the firm and its registered representatives offered. This penalty should serve as a wake-up call that FINRA is taking a sharp look at the due diligence that firms perform before and after offering a… Continue Reading

FINRA’s Private Placement Concerns

Posted in FINRA Compliance, FINRA Enforcement, Private Placements

FINRA is beginning investigations into private placements.  New FINRA Rule 5123 requires member firms involved in a private stock offerings to provide investors with detailed information on the transaction prior to the sale, and to file that information with FIRNA within 15 days after the first sale. The rule went into effect in December 2012.… Continue Reading

Guess Who Is Watching Your Private Placements

Posted in Private Placements

The dog-days of summer certainly did not apply to FINRA when it initiated eight disciplinary proceedings against member firms and registered representatives over private placements.  This heightened interest should serve as a warning to all broker-dealers to ensure that their house is in order before permitting private placements through the firm.  Unfortunately, the regulatory scheme… Continue Reading

Broker-Dealers Have to Start Filing Offering Documents

Posted in Broker-Dealer Regulation, Private Placements

With the recently adopted FINRA Rule 5123, broker-dealers selling private placements will have to file a copy of any private placement memorandum, term sheet, or other offering document with FINRA.  Further, if there are any material amendments, those amended versions of the documents will also have to be filed.  These filings must be made electronically within 15 calendar days… Continue Reading

You Gotta Be A Big Boy To Play In The Private Investment Transaction Game

Posted in Capital Formation, Corporate Financing, Private Placements, SEC Enforcement, Securities Associations, Securities Litigation

“Big Boy Letters” are usually used to identify that the buyer in a transaction has made its own independent assessment of certain risks involved and that certain information has not been disclosed to the buyer by the seller.  In particular, this means that a party is not relying upon certain representations or the lack of representations. The… Continue Reading