SEC Charges U.K.-Based Brokerage Firm with Violating U.S. Registration Requirements
Sept. 30, 2019
File No. 3-19565
September 30, 2019 - The Securities and Exchange Commission today charged Outset Global LLP, a financial services firm based in the United Kingdom, for providing brokerage services to institutional investors in the United States without being registered with the SEC as required under the federal securities laws.
According to the SEC's order, from July 2014 until September 2016, Outset Global executed thousands of transactions on behalf of U.S. institutional investors and generated millions of dollars in commissions. The SEC's order finds that Outset Global engaged with U.S. investors by contacting them via electronic mail and telephone calls and having employees travel to the United States to meet with U.S. institutional investors and potential firm customers.
The SEC's order finds that Outset Global violated the broker-dealer registration requirements of the federal securities laws and its conduct was outside the limited conditions under which an unregistered foreign broker-dealer may effect transactions with U.S. investors pursuant to Rule 15a-6 of the Exchange Act. For example, the SEC's order notes that Outset Global could have entered into a chaperoning agreement with a U.S. registered broker-dealer, which provides a means to qualify for the Rule 15a-6 exemption, but Outset Global did not do so until September 2016.
Outset Global consented to the SEC's order without admitting or denying the findings and was censured and ordered to cease and desist from future violations. Outset Global additionally agreed to pay disgorgement of $135,000, prejudgment interest totaling $22,409, and a $50,000 penalty.
The SEC's investigation was conducted by Jonathan Shapiro and was supervised by Carolyn M. Welshhans and Amy L. Friedman. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the U.K.'s Financial Conduct Authority.