SEC Signals Zero Tolerance For Unregistered Broker Activity

The SEC has made it unmistakably clear: if you are paid for selling securities, you must be a registered broker.

Word of advice from a securities lawyer: if it's a gray zone, go get registered. It's not that hard, and it's certainly not worth the risk.

In a string of January 2025 settlements, the Commission reaffirmed that transaction-based compensation remains the defining hallmark of broker-dealer status under Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"). Individuals and firms operating as "finders" in private placements—often under the mistaken belief that they fall into a regulatory gray zone—are finding themselves squarely within the SEC's enforcement crosshairs.