Equidate, Inc. and Equidate Holdings LLC agreed to settle charges with the Securities and Exchange Commission that, from August 2014 through December 2015, it offered and sold security-based swaps with persons who did not qualify as eligible contract participant. (ECPs constitute several types of highly sophisticated or financially qualified persons. Click here to access a definition at 7 USC § 1a(18).) Under applicable law, security-based swaps may only be offered and sold to retail persons that are subject to an effective registration statement and if the transaction is effected on a national securities exchange. (Click here to access 15 USC § 77e(e) and here for 15 USC § 78(f)(l).) According to the SEC, Equidate, with its wholly owned subsidiary, Equidate Holdings, provided an electronic marketplace for employees and shareholders of privately held companies and investors seeking to invest in the potential economic return in the shares of those companies. The contracts offered by Equidate included payment provisions that were triggered by certain events, such as a merger or acquisition or initial public offering at an underlying company. Typically, the contracts were designed to transfer the potential economic return of reference shares from an employee or shareholder to the investor through the respondents. Although Equidate maintained a website that obtained background information on investors, it did not determine whether they were ECPs. According to the SEC, Equidate expressly sought legal advice regarding whether its contracts would be considered swaps and was advised they would not. Respondents agreed to cease and desist from further violations of applicable and to pay a fine of US $80,000 to resolve the SEC’s charges.