SEC Takes Action Against Matching Site for Pre-IPO Shares
An online matching service for pre-IPO securities settled SEC charges that it operated as an unregistered broker-dealer. Although the service launched with a subscription fee for access to the platform, the respondents ultimately extended their activities in assisting buyers and sellers including posting form documents, recommending service providers, and serving as an intermediary. The respondents did work through broker-dealer representatives including officers of the platform, but the SEC charged that the platform itself engaged in broker-dealer activities because of the extensive nature of the firm’s involvement in the securities transactions. To remedy its issues, the firm acquired a broker-dealer. The Order required the respondents to pay a small $100,000 fine.