Executive Moves

FBR Acquires Trading and Research Staff from Lazard Capital Markets

By |

Investment banker and placement agent FBR & Co. (FBRC) has acquired 29 traders and research analysts from Lazard Capital Markets in what the middle market firm called a “negotiated transaction.” Included in the deal are six senior research analysts, six sales traders, three position traders, and four institutional sales people. FBR and Lazard declined to name the staff involved. With the acquisition of the Lazard staff FBR with initiate research coverage in the healthcare sector and expand coverage in the technology, media, telecom and consumer sectors. In total, the firm will provide research on nearly 500 public companies.

Markets
crowdfunding

Advertising Poised to Shake Up Emerging Growth Capital Markets

By |

The end to the ban on general solicitation in private securities offerings has ushered in an extraordinary capital markets transformation that could lead to more capital for small companies and startups, more investment opportunities for accredited investors, and more fraud. Observers compare the change to when securities trading eventually moved from the realm of broker-dealers to online trading platforms like E-Trade and Charles Schwab amid the ramp up of the Internet and other technological innovations. “We’re really on the verge of a paradigm shift as to how transactions are marketed, and it is because of this regulatory change,” said chief JOBS Act promoter and pioneer David Weild IV. “It will take a little bit of time, but the good news is that general solicitation has everybody talking about equity and small companies, and small companies are where jobs are created.”

Preparing for Change

The JOBS Act directed the Securities and Exchange Commission to end the ban on general solicitation under Title II, and market participants have wasted no time positioning themselves to take advantage of the newfound freedom. Companies and investment funds have already filed dozens of Form Ds indicating that they’re going to market their private offerings to the public.

Legal

Regulators Look at Sub-Account Use in Short Selling Crack Down

By |

Hedge funds and buy-side investment firms were targeted last month by the Securities and Exchange Commission for their actions in shorting shares in companies within the five days leading up to the pricing of a stock offering, and then purchasing those same securities from a broker-dealer participating in the offering. All but one of the twenty-three firms hit with the regulatory enforcement action over Rule 105 violations have settled. Eleven of the 23 firms involved, including Hudson Bay Capital, D.E. Shaw, and Deerfield Management, are active in PIPE and equity private placement investments and garnered some of the heftiest penalties in the case. Only one firm accused of the short-sale violations, G-2 Trading, is fighting the SEC’s claims. In settling with the other investors the regulator collected $14.4 million as monetary fines and the firms were allowed to continue doing business. The SEC has received complaints of this kind of “naked shorting” for years but this is the first time market participants have seen such a large scale crackdown.

Legal
Mary Jo White

SEC’s White Reiterates Support for Tick Size Pilot

By |

Seems that the SEC’s new head is both tough and flexible – flexible in her approach to the plight of stranded emerging growth companies without support from market-makers and research analysts. In recent appearances Mary Jo White, the agency’s new chair, has declared that a “one size fits all” approach to the markets is a poor model for securities regulation, and that one example of how poorly such an approach works is in the area of share price decimalization. Just last week White reiterated her support for a tick size pilot program that would study whether increasing the minimum pricing increment for small cap company shares – or allowing companies to choose their own “tick” size – would create greater liquidity by encouraging market-making and sell-side research coverage of emerging growth companies. The comments, coming in remarks White made at a securities traders association conference in Washington last week, reiterated her earlier statements that the tick size study should be greenlighted sooner rather than later. White told reporters that she had instructed SEC staff to move ahead with developing a tick size pilot program with the major U.S. exchanges.