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Case Study #1401
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The Client was a growing,
profitable and producing General Securities BD. They
wished to participate in an opportunity which would
require a staff double in size to their current
operation. They could build to accomplish this growth,
but this would take time – and the opportunity at hand
required they be operational at this new level in a
matter of weeks, if they wished to avail themselves of
it. They wanted to purchase a similar firm immediately,
with a skilled working staff that would stay on and
could handle this new business. |
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►The
Chief Executive of the client firm would not stay on
after purchase; so the firm would face the additional
hurdle of finding a new chief executive.
►The
Client also wanted the new employees to start work
immediately on their new project. This posed certain
problems, as a change in ownership must be reviewed
and approved by the FINRA, prior to new management
exercising control.The Client also wanted the new
employees to start work immediately on their new
project. This posed certain problems, as a change in
ownership must be reviewed and approved by the FINRA,
prior to new management exercising control. |
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The Challenge...
Identify a similar firm who would fit all
of the specific parameters, was willing to sell at a
reasonable price, and come up with a solution for the
major regulatory hurdle they faced: management of a
purchasing firm may not exercise any control until the
purchase has been reviewed and approved by the FINRA,
subject to rule 1017 and associated rules. The buyer
required that there be no downtime at either firm.
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