Navigating the regulations surrounding a private capital raise can be challenging. That's why we've put together a definitive guide to understanding the broker registration requirement.
Section 15(a)(1) of the Exchange Act makes it unlawful to facilitate the sale of securities without registering with the SEC, joining FINRA, and meeting a number of other federal and state regulatory requirements.
The issuer exemption is a safe harbor from the broker-registration requirement. However, it can only be applied narrowly, and many issuers that falsely believe they fall under its umbrella may actually be violating the law.
The enforcement of the broker registration rule is broad and often severe. This E-book outlines a few recent cases in which charges brought upon unregistered brokers resulted in fines and disbarment.