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Can I find an investor for a film maker and charge a finder's fee, or commission.

lamont strong's Profile

I am familar with an independent film maker who is looking for investors. I have a person that has indicated an interest. The problem is that I want to be compensated, in some way?

Answers

Topic Expert
David OBrien
Title: Treasury Consultant
Company: EE Treasury
(Treasury Consultant, EE Treasury) |

Lamont:

Enter into an agreement whereby the film maker is obligated to pay you upon funding.

David

Joseph Kershenbaum
Title: EVP and CFO
Company: Salute Homecare LLC
LinkedIn Profile
(EVP and CFO, Salute Homecare LLC) |

Lamont, I am am providing information only, not legal advice; please consult a practicing attorney for that. However, my understanding is that federal and state law does not permit engaging in broker-dealer activities without registration. Securities regulators have taken action against both finders and their employers for engaging in such activities, particularly since 2005-06.

It's a fuzzy line and a number of law firms have written about it, with differing advice, in the past several years. Among them, Venable LLP has a March, 2013 article entitled, "Finders may pose risk in private capital raising," available at http://www.venable.com/finders-may-pose-risk-in-private-capital-raising-03-22-2013/. If you search "Morgan Lewis Employing Finders and Solicitors: Proceed With Caution," you'll find a pdf that is another good resource.

I note that other legal commentators are more conservative in this area. One such firm, Tucker Ellis, has a pdf you can find if you search "Finders' fees: folklore and fact on regulation."

Good luck!

lamont strong
Title: Attorney
Company: LCS
(Attorney, LCS) |

Thank you very much Joseph. I came to the same conclusion. That is why I raised the question. Thanks again.

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