US appeals court accepts broad definition of securities ‘dealer’ in microcap fund case | Reuters

For the second time this year, the 11th U.S. Circuit Court of Appeals has accepted the U.S. Securities and Exchange Commission’s expansive view of who must register as a securities dealer, handing a setback to industry groups that had urged the appeals court to clarify the distinction between dealers and investment funds that trade securities on their own behalf.

The appeals court concluded in SEC v. Justin Keener, opens new tab that Keener’s Florida-based company, JMJ Financial, was operating as an unregistered securities dealer when it purchased convertible debt from microcap issuers, converted the debt into common stock and then sold a high volume of shares into public markets.

Source: US appeals court accepts broad definition of securities ‘dealer’ in microcap fund case | Reuters