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PAYING FINDERS WHO AREN'T REGISTERED BROKERS IS ILLEGAL
You cannot pay "finders," "business brokers," and other similar individuals or firms to help you raise money.
Individuals and firms that are not registered broker/dealers may offer to provide you with one or more of the following services if you pay them a commission or any other fee based upon the success of the transaction:
- Finding investors, even in a "consultant" capacity
- Making referrals to investors
- Engaging in, or finding investors for private placements
- Effecting securities transactions for the account of others for a fee, even when those other people are friends or family members
- Acting as "independent contractors," but are not "associated persons" of a broker-dealer
- In general, these persons are all acting as unregistered broker/dealers in that they:
- Participate in important parts of a securities transaction, including solicitation, negotiation, or execution of the transaction
- Receive compensation for participation in the transaction depending upon, or related to, the outcome or size of the transaction or deal or other transaction-related compensation
ALL OF THESE ACTIVITIES ARE ILLEGAL.
DO NOT SIGN A CONTRACT WITH ANYONE OTHER THAN A FINRA REGISTERED BROKER DEALER TO PROVIDE YOU WITH THESE SERVICES.
If you do, you are breaking the law and could suffer sever penalties.
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