S&C lawyers who advise on broker-dealer matters work closely with colleagues in the Firm’s other related practice groups. Together they provide broker-dealer clients with a full range of regulatory, corporate, securities, mergers and acquisitions, tax and other advice.
The Firm advises clients on the applicability of broker-dealer registration requirements, particularly regarding non-U.S. entities that wish to participate in the U.S. markets. S&C also represents unregistered affiliates of registered broker-dealers that wish to engage in securities-related activities.
In addition, the Firm advises a large number of broker-dealers that are affiliated with bank holding companies on the U.S. banking law requirements that apply to their securities activities.
Lawyers in the Broker-Dealer Group deal with all aspects of the business conducted by U.S. and non-U.S. broker-dealers.
Broker-Dealer Regulation
Sullivan & Cromwell offers advice on all regulatory, compliance and securities law matters, including:
- registration,
- trading,
- derivatives,
- research,
- margin,
- net capital,
- customer protection,
- supervisory and reporting requirements,
- clearance and settlement,
- SEC regulations, and
- Financial Industry Regulatory Authority (FINRA) and other self-regulatory organization rules.
The broker-dealer regulation practice also monitors developments in regulatory and compliance matters, including SEC and FINRA rule proposals.
The Firm represents broker-dealer clients in litigation, arbitration and regulatory enforcement proceedings. The Firm also advises broker-dealer clients in connection with regulatory inquiries and internal compliance reviews.
Broker-Dealer Mergers & Acquisitions
Sullivan & Cromwell advises clients in the acquisition or sale of broker-dealers. In this context, the Firm’s work includes assisting clients with the regulatory approval process and the conduct of a regulatory “due diligence” review. S&C has also provided extensive advice to broker-dealers seeking to develop and conduct business over the Internet, with particular emphasis on e-offerings, online trading operations and electronic communications networks.
Broker-Dealer Capital Markets
Sullivan & Cromwell has advised clients on many of the highest-profile capital markets transactions within the broker-dealer industry.
In addition to advising on transaction structure and implementation, the Firm provides extensive advice on regulatory and compliance aspects, including approvals for changes in control and business activities; “due diligence” reviews of legal matters; and syndicate trading, sales and research practices.
SELECTED REPRESENTATIONS
Sullivan & Cromwell's recent broker-dealer regulation experience includes representations of:- a boutique broker-dealer, in a merger with another boutique broker-dealer that resulted in a change in ownership and successor filing and a significant expansion of business activities under SEC and Financial Industry Regulatory Authority (FINRA) rules.
- a foreign bank’s affiliated U.S. broker-dealer, in expanding from a small advisory and private-placement business with about 25 registered representatives to include sales, trading and research activities and about 75 registered representatives.
- CICC US Securities, Davy Securities, Mediobanca Securities USA National Australia Capital Markets, Prescient Markets and The Municenter, regarding SEC and FINRA registration.
- Barclays Capital, CICC US Securities, Mitsubishi UFJ Securities (USA), Nomura Securities, RBC Capital Markets and UBS Securities, in ongoing compliance advice.
S&C’s recent broker-dealer capital markets experience includes representations of:
- Merrill Lynch, in its $6.6 billion private placement of mandatorily convertible securities and its $6.2 billion private placement of common stock.
- China Investment Corporation (China), in its $5.6 billion investment in Morgan Stanley through the purchase of mandatorily convertible securities.
- Thomas Weisel Partners Group, in its $103.5 million IPO.
- Partners Group Holdings (Switzerland), in its $424 million IPO.
- underwriters, in the $227.7 million IPO of Options Xpress Holdings.
- underwriters, in the $100.6 million IPO of Greenhill & Co. and its $156.4 million and $285.8 million follow-on stock offerings.
- broker-dealers or their affiliates, in securities offerings, including SEC-registered, Rule 144A/Reg. S, Reg. D and other private offerings of debt and equity, in the United States, Europe and Asia.
S&C’s recent broker-dealer M&A experience includes representations of:
- ING Groep, in the acquisition of ShareBuilder by ING DIRECT.
- Fox-Pitt, Kelton, in its acquisition of Cochran Caronia Waller Securities.
- Citadel Investment Group, in its acquisition of a 25 percent stake in Direct Edge Holding.
- Archipelago Holdings, in its $10.5 billion merger with the NYSE.
This merger was the largest-ever merger among securities exchanges.
- Sumitomo Mitsui Financial Group, in its $1.6 billion acquisition of SMBC Friend Securities.
- Piper Jaffray Companies, in the $815 million sale of its Private Client Branch Network to UBS.
- UBS, in its $624 million acquisition of Caisse Centrale de Réescompte.
- RBC Capital Markets, in its acquisition of the broker-dealer business and other assets of Carlin Financial Group.
