Brokers And Licensing

What a broker can and cannot do

NO mergers and acquisitions professional will represent both a buyer and a seller in a transaction. If they tell you they will and ask for a fee from both, pay attention and talk to your attorney.

Also, if at any time your transaction turns into a stock sale, the broker/intermediary has to take a function simply as a paper pusher, shuffling documents. Any involvement by an intermediary where any discussions occur regarding the value of the stock taints the transaction unless the broker is employed by an SEC regulated broker dealer. The law states that the remedy is rescission of the purchase and disgorgement of the fee. This means if you do a stock deal and the broker is involved in the transaction as anything but administrative, you could be subject to getting your business back. Not good.

The SEC is proposing that Mergers and Acquisitions professionals obtain the MAB (mergers acquisitions broker). On top of any necessary real estate licensing, the broker would register with the states’ securities licensing division and would follow some strict rules. Then, they would be able to give advice regarding stock transactions.

Also, brokers take deposit checks, maintain escrow accounts, etc. Mergers and Acquisitions professionals require that the party’s lawyers draft and maintain these.