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Broker Double Dealing

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I recently engaged a broker to find an investor for my start-up. He did and a deal was struck. Afterwards, I found out the broker not only received a fee from me, but had negotiated to receive a part of my company from the investor. During the negotiations, he had urged me to give up more of the company, now it makes sense.

Did he violate any laws or broker regulations (I'm in NY)?



I am assuming your company is a corporation of some sort (basic, S type, LLC, etc.) so the basic, short answer to your question is "Yes" the broker violated rules. He should have notified you in writing that he had an adverse interest in the transaction. In other words, the more of the company he could convince you to give up, the more money he would make. Since you are dealing with stock it is regulated by both the NY state "blue sky" rules as well as various federal regulations. For more particulars on your situation, contact a securites attorney near you. You can find one at attorneypages

Mark B. Replogle

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