Court Adopts SEC’s Expansive View of ‘Dealer’: SEC Roundup

Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.

In this episode, Marc Indeglia, president of the Small Public Company Coalition, explains the ramifications of a federal court’s recent adoption of the SEC’s expansive view of what it means to be a securities “dealer.”

The 11th Circuit has now twice agreed with the SEC’s position that registration is required for those who purchase convertible debt from public companies, convert into common stock and sell into public markets.

The SEC’s rationale threatens to ensnare unsuspecting private funds, family offices and private investment in public equity, or PIPE, investors who have not historically been considered securities “dealers.”