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Investor Communications, Asset Management


#402
Time For A New Gorilla?

Published:

Aug 28, 2021


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Posted In:

Investor Communications, Asset Management

Published:

Aug 28, 2021


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A small Florida-based drugmaker called Catalyst Pharmaceuticals Inc. was hit with a bill last year for over $200,000 to cover the costs of sending out proxy materials to investors ahead of its 2020 shareholder meeting. In 2019, that number was $12,500.

This was due to the massive increase in Catalyst’s shareholder base - primarily because it was one of the stocks that Robinhood had decided to give out for free.

The 800 pound gorilla collecting these fees is Broadridge Financial Solutions. Broadridge commands roughly 80% market share and reaches over 140 million investor accounts. The company has come under scrutiny for the fees it charges to send shareholder communications, and track if shareholders prefer email over paper.

While Broadridge’s fees are regulated (capped at 25 cents per report), recent scrutiny around their market dominance has generated a new set of questions. U.S. public companies and funds have asked the SEC and FINRA to make changes to the current rules. A former SEC director called the company a monopoly, and Broadridge recently hired former SEC counsel as their Chief Legal Officer.

With the rise of the retail investor, this service will only become more lucrative (or costly, depending on how you look at it) if left untouched. Broadridge may remain the current 800 pound gorilla today, but we’re left to wonder if regulators, or perhaps the WallStreetBets crowd, will attempt to build a cage, or a new competitor will arise...

Portfolio News


SIMON and NYDIG partner to deliver bitcoin education and investments to financial professionals - This timely development, strategically aligned with market demand and evolving regulatory standards, positions SIMON to launch a framework and workflow for wealth managers to access digital assets with curated educational curricula, tracking, and product controls. Read more

RealVision interview with Nadav Hollander: Why wallets may be the key to crypto adoption - Nadav Hollander, CEO and co-founder of Dharma, envisions a brave new world, with wallets paving the way. He dives into innovation in personal identity and Dharma's "Smart Wallets". The classic dilemma when storing one's cryptocurrency is whether to maximize security with a non-custodial wallet or forgo security for the ease of use and password recovery of an exchange. Read more

Defactor and Centrifuge announce strategic partnership - SMEs looking to access DeFi liquidity through Centrifuge will be able to do so via Defactor’s innovative and easy-to-use protocol interface. Through Defactor’s protocol, real-world asset originators and DeFi lenders seeking to connect through Centrifuge’s platform will be able to benefit from enhanced KYC processes, insurance protection, and asset authentication procedures. Read more

Time for a New Gorilla?


A true monopoly: fee fight reveals heft of Wall Street linchpin Broadridge - Fees as high as 25 cents an email to send mass correspondence to investors are riling executives at public companies and mutual funds and putting a spotlight on the power of an obscure but lucrative Wall Street utility, Broadridge Financial Solutions. Read more

Regulators scrutinize a Robinhood marketing ploy: free shares - Brokerages like Robinhood are required to deliver proxy materials to a public company’s shareholders ahead of annual meetings. They are then reimbursed by the public company for the cost of distribution. This means that Robinhood’s stock giveaways have saddled some companies with larger bills for delivering proxy statements. Now, the practice is sparking a backlash from companies and scrutiny from market regulators. Read more

Robinhood stock gains on $140m Say Technologies takeover deal - The all-cash deal will bring Say into the Robinhood architecture, the company said, allowing the pair to "find new ways to expand what it means to be an investor through new products and experiences that democratize shareholder access." Read more

Industry News


Visa buys CryptoPunk NFT for $165,000 in ethereum - Visa is bullish on NFTs. The payments giant not only believes "NFTs will play an important role in the future of retail, social media, entertainment, and commerce," but it is putting its money where its mouth is. Read more

South Korea moves to ban Apple and Google’s payment exclusivity - The companies reportedly are both pushing back strongly against the bill, which has been dubbed the “anti-Google law.” If it passes, however, it would be one of the first major power checks on the tech companies by a major economy - essentially ending the commission on in-app purchases in the country. Read more

Citi considering bitcoin futures trading for some institutional clients - The bank was weighing the option of providing cryptocurrency related services back in May, and is now awaiting regulatory approval to begin trading bitcoin futures on the Chicago Mercantile Exchange, citing a source within the bank. Read more

OnlyFans founder blames banks for ban on porn - OnlyFans’ founder Tim Stokely has blamed “unfair” treatment by banks for forcing him to ban pornography on the platform, a decision that caused an outcry from the site’s users and sowed doubt over its future. Read more

TikTok expands Shopify partnership, pilots TikTok Shopping in US, UK and Canada - The expanded deal being detailed today takes things a step further. Soon, Shopify merchants with a TikTok For Business account will be able to add a new “Shopping” tab to their TikTok profiles and sync their product catalogs to create mini-storefronts on their profile. Read more

PayPal launches its cryptocurrency service in the UK - PayPal’s crypto feature lets customers buy or sell bitcoin, bitcoin cash, ethereum or litecoin with as little as £1. Users can also track crypto prices in real-time, and find educational content on the market. Read more

Brex launches $150m venture debt business - To back the expansion, called Brex Venture Debt, the company has raised a new $150m fund and began making its first loans to other startups earlier this month amid an unprecedented boom in venture debt financing. The startup is the largest investor in the fund, according to a person with direct knowledge. Read more

The secret bias hidden in mortgage-approval algorithms - This algorithm was developed from data from the 1990s and is more than 15 years old. It's widely considered detrimental to people of color because it rewards traditional credit, to which White Americans have more access. Read more

He’s just 12 years old and has already made over $350,000 selling NFTs - Benyamin Ahmed likes whales. He’s also enjoyed coding since he was 5. And those two hobbies have given this 12-year-old a solid base for his financial future. Read more

Select Financings


Aumni - Salt Lake City based investment analytics platform for private markets raised $50m in Series B funding led by JPMorgan. Read more

Balance - Tel Aviv based payments platform aimed at B2B merchants and marketplaces raised $25m in Series A funding led by Ribbit Capital. Read more

Blockstream - Canada based bitcoin technology company raised $210m in Series B funding from Baillie Gifford and iFinex. Read more

Bungalow - San Francisco based residential real estate marketplace raised $75m in Series C funding led by Deer Park Road. Read more

CapShift - Massachusetts based impact investing platform raised $5m in Series A funding led by Bain Capital Europe, Aperio, and Addepar. Read more

Cora - Brazil based lender to SMBs raised $116m in Series B funding led by Greenoaks Capital. Read more

DealerPolicy - Vermont based digital insurance marketplace for auto retail raised $110m in Series C funding led by Goldman Sachs Asset Management. Read more

Elopage - Berlin based payment SaaS platform raised €32m in new funding led by Target Global, Partech Ventures and Avid Ventures. Read more

Flink - Mexico City based neobroker raised $57m in Series B funding led by Lightspeed Venture Partners. Read more

Indiagold - India based gold-focused digital credit platform raised $12m in Series A funding led by PayU and Alpha Wave Incubation. Read more

Khatabook - India based provider of merchant bookkeeping and online payments solutions raised $100m in Series C funding led by Tribe Capital and Moore Strategic Ventures. Read more

MakersPlace - San Francisco based digital art marketplace raised $30m in Series A funding led by Bessemer Venture Partners and Pantera Capital. Read more

OPay - Nigeria based mobile payments platform raised $400 million in new funding led by SoftBank Vision Fund 2. Read more

PawaPay - UK based Africa focused mobile payments startup raised $9m in Seed funding led by MSA and 88mph. Read more

Ramp - New York based spend management startup raised $300m in Series C funding led by Founders Fund. Read more

XREX - Taipei based provider of business blockchain services like a crypto-fiat exchange raised $17m in Seed funding led by CDIB Capital Group. Read more

Zepz (fka WorldRemit) - London based digital cross-border payments platform raised $292m in Series E funding from investors including Farallon Capital, Leapfrog, TCV and Accel. Read more

Zeal - Chicago based payroll infrastructure startup raised $13m in Series A funding led by Spark Capital. Read more

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