November 5, 2020
One one hand there are obvious reasons for the existence of broker-dealers and licensed brokers and agents, and investors, companies (issuers), and the public at large have by and large benefited from the regulations imposed thereby. On the other, as the commission points out, smaller issuers have at times faced greater challenges in raising capital because of this, usually due to the fact that regulated firms have found it uneconomical to undertake small raises that do not contribute sufficiently to their overhead. As a result we have finders, a class of individuals that at times has helped issuers achieve their capital formation objectives, and for that the public should be grateful, provided that a given finder was not acting in such role on an ongoing basis but rather for a single transaction, and provided ample disclosure was provided to investors so that they were making informed investment decision, and conversely that issuers were given all the appropriate information about the investors. And therein has lied the challenge of how to allow this class of finders to operate legally relative to the licensed class of brokers and agents. Within the context of the commission's suggested exemptive order, in my opinion there should be a single tier with robust regulations and guidelines. A single tier will minimize confusion and abuse, while protecting the broker-dealer industry, which deserves protection due to the professionalism and expertise it brings to issuers.