Sullivan & Worcester announced the creation of its Small-Firm Task Force, a dedicated cross-disciplinary team designed to support small to mid-sized broker-dealers in navigating the review announced by the Financial Industry Regulatory Authority (FINRA) of firms’ practices relating to public and private offerings of small-capitalization, exchange-listed issuers with business operations in foreign jurisdictions, such as China. The FINRA announcement targeting small-cap offerings also seeks to review compliance with Reg M and FINRA Rule 5210, governing quotes of securities. Sullivan’s Task Force is intended to assist firms in responding to inquiries and effecting meaningful compliance during the review period and beyond.
In light of FINRA’s renewed focus on small-cap issuers that have foreign business operations, the Task Force brings together members of Sullivan’s market-leading Capital Markets, Government Investigations, Regulatory Compliance and Securities Litigation practice groups. The integrated team offers clients comprehensive, practical counsel tailored to helping issuers, underwriters and other market participants assess, mitigate and manage potential risk exposures, compliance obligations and disclosure challenges.
Managing Partner of Sullivan’s New York office David E. Danovitch explained the firm’s move: “No sooner than the industry is beginning to stabilize do we see another major sweep and inquiry into matters that have been covered by various agencies over the past several years. We are uniquely positioned to assist firms in responding to these inquiries. Our longstanding practice throughout Asia and our in-depth experience with Reg M issues and related compliance will now be used as a resource to assist firms in responding to these inquiries and review and, if necessary, proactively improve their procedures.”
Danovitch, who also maintains his securities licenses at a small broker-dealer, added: “This is a crushing request that covers nearly three years. The market for small-cap offerings has been challenged since early 2022. The markets are just beginning to improve. This is an unfortunate development.”
In addition to Danovitch, Sullivan Partners Michael Dyson and Meghan Rohan will round out the Task Force. The creation of the Small-Firm Task Force underscores Sullivan’s ongoing commitment to helping clients navigate complex legal environments with integrated, forward-thinking solutions.
Sullivan & Worcester is a global, mid-sized law firm with lawyers in Boston, London, New York, Tel Aviv and Washington, D.C. Sullivan’s clients, including Fortune 500 companies, leading financial services firms and asset managers, boards of directors, real estate companies, and emerging businesses, rely on Sullivan’s ability to navigate complex legal and operational landscapes, the impeccable judgment of its lawyers, and its commitment to best-in-class client service.
