Regulatory Outlook | 11.18.20
State Regulators Ask SEC to Shelve Private Placement Finders Plan
About 30 state securities regulators are urging the SEC not to move forward with its proposal to create a federal broker-dealer exemption for unregulated private placement “finders,” amid growing concerns the proposal lacks adequate investor protections and is ripe for abuse. “This proposal runs directly counter to the public interest and will actually harm rather than protect investors,” state securities regulators said in a joint letter to the SEC. “Given both perennial concerns and recent incidents of extraordinarily harmful frauds perpetuated by persons acting as finders, the last thing state securities regulators expected to see was a commission proposal that facilitates unlicensed intermediaries in the private market.”
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