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FINRA proposes to create “limited corporate financing brokers”
- Calfee Halter & Griswold LLP
- Robert N. Rapp
- USA
- March 11 2014
FINRA -- The Financial Industry Regulatory Authority -- has announced a rulemaking initiative aimed at the creation of a new class of FINRA registered securities broker-dealers that engage exclusively in a limited range of activities identified by FINRA as, essentially, advising companies and private funds on capital raising and restructuring transactions. Investment banking or mergers and acquisition (M&A) firms meeting the definition of “limited corporate financing broker” (LCFB) would be eligible to register with FINRA under a proposed streamlined rule set that would apply exclusively to those firms. LCFB membership status would be open to new applicants as well as existing FINRA member firms that elect to convert their status to an LCFB based on the limited scope of their activities.
Few issues cause as much consternation among smaller investment banking and M&A firms as the prospect of required registration and licensing as a securities broker-dealer under federal and state securities laws by reason of activities and transactions actually or potentially involving the purchase or sale of securities. Whether involving capital raising or facilitating corporate transactions by means of equity transfers, firms that are not broker-dealers or affiliated with a broker-dealer tread carefully in rendering their services, and are necessarily constrained in the range of services they may provide and the manner in which they may be compensated.
Legislative initiatives aimed at exempting M&A intermediaries from federal broker-dealer registration for small transactions involving the sale of privately owned businesses are underway, and most recently the Staff of the U.S. Securities and Exchange Commission (SEC) has recognized that activities of an “M&A Broker,” as that term is defined in the same privately held company setting, will not trigger the federal broker-dealer registration requirement where services of the intermediary satisfy certain limitations.
In the main, however, investment banking and M&A firms continue to grapple with the potential for being found to be an unregistered broker-dealer in the larger context of their engagements that involve securities transactions and any form of transaction-based compensation. The solution for some firms is to become a broker-dealer, in which the major undertaking is becoming and operating as a FINRA member firm, subject to the full range of FINRA rules without regard to the limited nature of the firm’s securities-related activities.
Defining LCFB and the Scope of Permissible Activities
Recognizing that firms not engaged in the types of activities typically associated with traditional brokerdealers should be subjected only to rules that match the limited scope of their business, FINRA proposes an LCFB membership status open to any firm engaged solely in limited activities. Under the proposed rules (for which comments by all interested parties may be submitted to FINRA up to April 28, 2014), the term “limited corporate financing broker” would be defined as any firm that solely engages in one or more of the following activities:
Advising an issuer, including a private fund, concerning its securities offerings or other capital raising activities;
Advising a company regarding its purchase or sale of a business or assets, or regarding its corp
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200K Report Update- Lance Wallach 419, 412i,
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IRS Form 8938
FATCA requires any U.S. person holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets on a new form (Form 8938) that must be attached to the taxpayer’s annual tax return. Reporting applies for assets held in taxable years beginning on or after January 1, 2011. Failure to report foreign financial assets on Form 8938 will result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Further, underpayments of tax attributable to non-disclosed foreign financial assets will be subject to an additional substantial understatement penalty of 40 percent.
Under FATCA, U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on a new form attached to their tax return. Penalties apply for failure to comply with this new reporting requirement. Repo
Regaining Confidentiality of Off-Shore Trusts
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Introduction Lance Wallach, CLU, ChFC, speaks and writes about 419e, 412i, listed transactions, 6707A, IRS form 8886,benefit plans, tax reductions strategies, and financial plans. He has authored numerous books for the AICPA, Bisk Total tape, and others. He can be reached at (516) 938-5007 or wallachinc@gmail.com. For more articles on this or other subjects, feel free to visit his website at http://www.taxlibrary.us
Interests Lance Wallach, the National Society of Accountants Speaker of the Year, speaks and writes extensively about retirement plans, 419e, 412i, 6707A, listed transactions, Circular 230 problems and tax reduction strategies. He speaks at more than 20 conventions annually, writes for over 50 publications, is quoted regularly in the press, and has written numerous best-selling AICPA books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Business Hot Spots. He does extensive expert witness work. Contact him at 516.938.5007, wallachinc@gmail.com, or visit http://www.taxaudit419.com and http://www.lancewallach.com
IN THE UNITED STATES DISTRICT COURT
ReplyDeleteFOR THE EASTERN DISTRICT OF PENNSYLVANIA
BISHNU C. BORAH, M.D., P.C., :
and BISHNU BORAH, M.D., :
Plaintiffs, : CIVIL ACTION
:
v. :
:
MONUMENTAL LIFE INSURANCE :
COMPANY, et al., : No. 04-3617
Defendants. :
MEMORANDUM AND ORDER
Schiller, J. February 14, 2005
PlaintiffsBishnuBorah,M.D.(“Borah”) andBishnuC.Borah,M.D.,P.C.(“Borah,M.D.”)
bring this action alleging RICO violations, violations of the New Jersey Racketeering Act and the
New Jersey Consumer Fraud Act, fraud, negligent misrepresentation, breach of fiduciary duty,
respondeatsuperior,andconspiracy. Presently before the Court is the motion of Defendant Sea Nine
Associates (“Sea Nine”) to dismiss. For the reasons below, this Court grants the motion.
I. BACKGROUND
The following allegations are taken from the Complaint and accepted as true for purposes
of the instant motion. Borah practices medicine through Borah, M.D. The numerous Defendants
in this action are insurance companies, insurance salespersons, financial services companies, and
financial planners who have engaged in a scheme to inducePlaintiffsto participate in a programof
life insurance known as Continuous Group (“C-Group”) life insurance. (Compl. ¶ 1.) Various
DefendantsmarketedtheC-GrouplifeinsurancethroughVoluntaryEmployeeBenefitAssociations
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