Firm Update: February 2022

Below you will find from me with short commentary as to deal best practices, and then compliance updates from Michelle Mueller and on collaboration from Zaya Bold.

To all of our success!

Jay Turo
Managing Director
GT Securities, Inc.


Commentary on Deal Best Practices

In my ongoing conversations with bankers both on and off our platform, along with my review of the results metrics of the firm, I have seen three distinctions between bankers that close a higher percentage of their mandates from those that don’t. They are:

 #1. They Work on Big Deals. Perhaps obvious, but GT Securities 2021 deal data is quite eye-opening: of the 225 client mandates onboarded on the platform last year, approximately 25% had expected transaction values of greater than $50 million. And more than half of these progressed to a transaction close!

This compares to the remaining 75% of mandates with expected transaction values of less than $50 million – of this group approximately 25% progressed to close (50% less likely).

Now for sure I know the challenges of sourcing and winning larger deals – and that a good living can be had working market niches involving smaller transactions – but the fact remains that there is a strong correlation between a deal’s size and its likelihood of close.

#2. They Maintain a Strong Industry and/or Product Focus. This is both a qualitative and quantitative assessment: the more specific a banker’s industry and/or product focus, the higher has been their average transaction revenue.

This too may seem obvious, but we all know the temptation to take on a deal outside of one’s core focus/specialization for the various reasons: the deal comes from a personal contact, bandwidth is available, “I can learn as I go”, etc.

While of course there are always exceptions, the data bears out that the better performing bankers resist this temptation by either referring out “non-core” deals or politely turning them down.

#3. They Know When to Walk Away. The willingness to walk away from deals “early and often” is a definite success factor for the better performing bankers on our platform.

These walkaways can happen before a “most likely to fail” mandate is taken on and perhaps more importantly deep into a deal process when the “tea leaves” are shouting out that most likely the deal isn’t just going to get done.

A good option I’ve seen – as opposed to just “ending it” – is to put things on pause until something happens that changes the deal dynamic – company progress, improved market conditions, etc.

So hunt the big deals, stay true to your expertise, know when to walk away and assuredly more transactional success and greater income will follow!


Compliance Updates

2022 Attestations. Please note that the 2022 annual attestations will arrive in your inbox the week of February 7th. We will be utilizing the new Firm technology protocol to make the process more efficient. Fully complete and accurate responses to all attestation questions is one of the most important requirements mandated by FINRA for Registered Persons. Of particular importance is to ensure ALL of your Outside Business Activities disclosed on social media / in public records (company incorporations, for example) are disclosed and approved.

Form U4 UpdatesPer my note last month, as you complete your attestations do review your Form U4 information currently disclosed proactively. Then, during the annual attestations process, the information should match what is disclosed to the firm, FINRA, and on public appearance profiles (LI, Websites). One of the most common areas of regulatory flags is incomplete and/or out-of-date FINRA Form U4s. Click Here to access the Financial Professional (FinPro) Gateway. Once in FinPro, scroll down through each section of the U4, making sure the information is accurate and current. Pay close attention to the following areas, ensuring all information is correct: Address, Employment, Outside Business Activities, Disclosures. If you notice anything that needs to be changed, please contact [email protected]net.

Also, in the upper right-hand corner of the page, select “My Account” to make sure the contact information is up to date to receive notifications directly from FINRA regarding Continuing Education requirements.

WhatsApp, and other electronic communication channels. JP Morgan fined a $200 million penalty for record-keeping violations due to non-firm approved WhatsApp use.  The lesson for all GT Securities Registered Persons is to remember that no Firm business – i.e. offering or sales of securities – can be conducted other than via Firm archived email accounts.

“As technology changes, it’s even more important that registrants ensure that their communications are appropriately recorded and are not conducted outside of official channels in order to avoid market oversight,” SEC Chair Gary Gensler said in the statement. Read the full article here.

SPACs. Over the past couple of years, there has been an increase in Special Purpose Acquisition Companies (SPACs) in the securities markets. What is a SPAC? Companies with no commercial operations formed to raise capital through an initial public offering, transitioning businesses from private to publicly traded. Also commonly referred to as blank check companies or shell companies, these instruments have become popular vehicles for various transactions. SPACs continue to gain special attention and scrutiny from securities regulators, exposing investors to high risks with low returns. In Regulatory Notice 08-54, FINRA provided guidance noting “the risk that SPAC managers are unqualified” and “the risk that no acquisition will occur and the SPAC will be liquidated.” “Shares of half of the companies that finished SPAC deals in the last two years are down 40% or more from the $10 price where SPACs typically begin trading, erasing tens of billions of dollars in startup market value – WSJ.” Read the full article here.

In December of 2021, SEC Chair Gary Gensler proposed tougher disclosure and liability requirements for SPACs. Listen to the remarks here.

Common cybersecurity threatsLearn more about current cybersecurity threats here.

– Michelle Mueller, Compliance Manager


Collaboration Updates

 Collaboration Deals. We receive many deal opportunities from our affiliate bankers and external partners and upon assessing them, we are happy to share select deals with our affiliate network.  Please feel free to reach out to me at [email protected] for further information

Family Office DatabaseAs a GT Securities affiliate, you have complimentary access to several research platforms including Family Office Databases. It includes an average of 2-3 contacts per family office and more than 4,622 contacts for over 2,289 total family offices worldwide. Please reach out to me for access information.

ReferralsDo you know an investment banker looking for the benefits of independence and professionalism provided on the GT Securities platform? We are always interested in speaking to highly ethical and credentialed banking professionals to join our platform, and starting in 2022 we are offering credits and bonus for referred bankers. Please just reply to this email or reach out to me at [email protected] to learn more.

Help Us Help YouTo help us better match you with deals, opportunities appropriate for your banking practice, please do update your practice details via completing our 2022 GT Securities Banker Survey available at this link.

– Zaya Bold, Director of Banking Synergies

Here’s to a great 2022 for us all!