Sponsoring Market Makers And Going Public

The last step in going public transactions is most often obtaining a stock trading or ticker symbol from the Financial Industry Regulatory Authority (“FINRA”). For a company to obtain a ticker, a market maker must submit a Form 211 on the issuer’s behalf to the Finance Industry Regulatory Authority (“FINRA”). This last step is required of all companies including those filing Form S-1 registration statements with the SEC.

Only a Market Maker can submit a Form 211 to obtain a

The Laws That Apply to Finders

Companies seeking capital are frequently approached by finders who offer to locate investors in exchange for a fee.  This is particularly true in going public transactions. Most finders are not registered as broker-dealers with the Securities and Exchange Commission (the “SEC”).

The possibility of receiving capital even through the efforts of a finder creates a tempting opportunity for issuers who need capital.

Matching companies with investors can be a lucrative proposition for the finder. While it may

The Laws That Apply to Finders

Companies seeking capital are frequently approached by finders who offer to locate investors in exchange for a fee.  This is particularly true in going public transactions. Most finders are not registered as broker-dealers with the Securities and Exchange Commission (the “SEC”).

The possibility of receiving capital even through the efforts of a finder creates a tempting opportunity for issuers who need capital.

Matching companies with investors can be a lucrative proposition for the finder. While it may seem harmless enough, the SEC does not think so and in fact, the SEC frequently brings cases against unregistered finders and those who aid and abet them.

Boiler Rooms Are Back in Style

Everyone who’s seen the movie “Boiler Room” is familiar with how these operations work; for once, the film makers had no need to exaggerate.  Real-life boiler rooms are run by unscrupulous con artists who hire cold callers to sell stocks and other securities to their naïve and unwary victims, using extremely high-pressure sales tactics.

The classic boiler room is run by a broker-dealer that claims to be independent, specializing in stocks chosen by their “analysts,” who, they say, have conducted extensive due diligence on the issues.  In reality, the boiler room usually colludes with company management and/or insiders.  Often they own large blocks of stock obtained at very low prices; sometimes they paid nothing at all.  They will sell into their own promotion.