Unlocking New Potential: Switching from 506b to 506c Mid-Raise
When it comes to raising capital, companies have options. The most common in terms of both volume and investors is a private placement utilizing the...
2 min read
Alex Pauliukonis
:
Aug 24, 2023 3:22:03 PM
Regulations within the alternative investment industry constantly evolve. With its dynamic nature, it can prove difficult for financial advisors and sponsors to remain compliant. The lack of timely and thorough knowledge of these regulations and adequate surveillance can lead to pitfalls and violations, resulting in fines or other enforcement actions by the SEC, FINRA or state regulators.
According to AdvisorLaw’s 2022 FINRA Enforcement Year-In-Review, the top five FINRA violations related to customer arbitrations in 2022 were:
This is where a managing broker-dealer (MBD) could provide real benefit—but what differentiates a typical MBD from a good MBD? One role of a MBD is to provide support to financial advisors and sponsor clients. However, a good MBD will take the extra step. A good MBD does their research, stays up-to-date on all new and upcoming regulations, and utilizes their expertise to educate and assist their clients. This advisory stance further safeguards their clients and can diminish the chance of future violations. A MBD provides a service, but a good MBD provides a partnership.
We’ve put together a list of what a good MBD does to go the extra mile to help avoid the common violations listed above.
A good MBD, like WealthForge Securities, goes above and beyond standard compliance services offering expertise, support, and resources to navigate the regulatory landscape effectively.
Special thanks to Jathan Jackson who also contributed to this post.
When it comes to raising capital, companies have options. The most common in terms of both volume and investors is a private placement utilizing the...
Regulations within the alternative investment industry constantly evolve. With its dynamic nature, it can prove difficult for financial advisors and...
When Title II of the Jump Start our Business Startups (JOBS) Act took effect in September 2013, Rule 506 of Regulation D was split into 2 distinct...