Solicitor Banned from Industry for Raising Assets without BD
An individual who solicited investment funds agreed to a ban from the industry and to pay fines and disgorgement for receiving transaction-based compensation from the issuer without supervision by a broker-dealer. The respondent solicited investors for private offerings and received up to 5% of the offering proceeds as compensation. Although he was associated with a broker-dealer, he conducted his activities away from his BD and was not associated with the funds’ placement agent. Although he later tried to disguise his activities as consulting services, the SEC alleges that the transaction-based compensation was not linked to the services performed. The SEC charges violations of Section 15(a) of the Exchange Act, which makes it unlawful to effect transactions in securities unless unregistered as a broker-dealer.