NYS Attorney General Says that Law Firm Introductions Required BD Registration
A law firm that attempted to facilitate introductions between public pension plans and private funds agreed to pay $550,000 and a five-year appearance ban for failing to register as a broker-dealer. The agreement with New York State arose from the continuing investigation into pay-to-play practices. The New York Attorney General charged the law firm with attempting to effect transactions in securities without proper registration or licensing. The firm did not receive compensation and was not successful in securing investments.
OUR TAKE: Generally, the requirement to register as a broker-dealer arises because the purported broker-dealer received some type of transaction-based compensation. The New York State Attorney General has dispensed with that requirement, alleging that mere introductions give rise to BD registration requirements.