Corporate Financing and Conflicts of Interest
Chapters in this video
- 0:00 Why FINRA acts as the fairness bouncer after SEC registration
- 0:37 No fixed percentage ceiling and the total compensation package
- 1:59 The 180-day lock-up, commencement of sales timing, and exceptions
- 3:12 The conflict trap, 5% of proceeds, and the QIU automatic assumption
- 4:58 The dual 5% rules separated, proceeds versus ownership caps
- 5:55 QIU experience requirement and full underwriter liability assumption
- 7:19 Control relationship oral disclosure trap and distribution participation written notice
- 7:42 Rapid-fire exam recap
What this video covers
- Why FINRA uses an "unfair or unreasonable" standard for underwriting compensation, and why there is no fixed percentage ceiling on exam day
- When the 180-day lock-up on securities deemed underwriting compensation starts, and why commencement of sales differs from effectiveness
- What the three conditions are that let a conflicted member avoid a qualified independent underwriter (QIU) through disclosure only
- Why a QIU must have served as underwriter in three public offerings of similar size and type within the past three years, and why the QIU assumes full registration-statement liability
- When control relationship disclosures can be oral initially but require written supplement before settlement, and why distribution participation notice must always be written
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