BACKAugust 22, 2019
Broker-Dealer, Investment Adviser,USA,Maryland

Should I file a U-4 as an agent of the issuer?

I’m a solo practitioner RIA based in Nevada that entered into a referral relationship with a TX based issuer. The agreement specifically defined my scope of services as a finder and compensation as a finder’s fee. I introduced the issuer to a MD based client of mine who ultimately decided to invest money in the company. I did not help effect the transaction nor did I recommend the opportunity to the client. It was purely an introduction. MD contacted the issuer asking for information about their compensation arrangement with me and despite the legal counsel of the issuer stating that they viewed me as only a finder and only disclosed my compensation as a “sales person” because the federal Form D filing required disclosure of finder fees paid too, the regulator has stated that the issuer needs to either file a U-4 identifying me as an agent of the issuer or I need to return the finder fee. I’m unsure if I truly qualify as being an agent of the issuer given the limited scope of my engagement and if I’m bringing any undue scrutiny on myself by doing that. However, it’d be a significantly cheaper alternative than to return the fee I received. I’d love to get people’s thoughts.