STONEHAVEN LLC CUSTOMER RELATIONSHIP SUMMARY 06-30-2020Item 1. Introduction Stonehaven, LLC is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. We are not a registered investment adviser. Brokerage and investment advisory services and fees differ, and it is important for you to understand these differences and how they may be applicable to you. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. Additionally, free and simple tools are available to research broker-dealers and registered representatives at Brokercheck.FINRA.org. Item 2. Relationships and Services – What investment services and advice can you provide me? Conversation starters: Given my financial situation, should I choose a brokerage service? Why or why not? How will you choose investments recommended to me? What is your relevant experience, including your licenses, education, and other qualifications? What do these qualifications mean? We engage as a registered broker-dealer in the private placement of securities on behalf of issuers. We introduce our private issuer clients to investors who are qualified to buy their respective offering, such as accredited investors. We also represent companies in corporate acquisitions, restructurings, asset sales, reorganizations and other transactions involving private placements of securities. We provide non-broker-dealer advisory services, on a select basis, in connection with these transactions. We do not facilitate transactions in any publicly listed securities. We neither carry customer accounts nor maintain any clearing arrangement with any clearing firm. We introduce our private issuer clients to qualified investors who independently consider each investment opportunity. Our clients are the private issuers that we represent. Any transactions that happen because of our introduction to you will be defined through a direct engagement between you and our private issuer client. The private issuers that we represent have sole discretion as to whether they accept capital from you. We will not monitor your account. The illustration below explains how we typically engage private issuer clients: It’s important to understand that Stonehaven’s registered representatives are independently branded capital raising agents. We refer to these agents as Affiliate Partners. Affiliate Partners hold securities licenses (such as the Series 7 and Series 63) that enable the Affiliate Partner to engage in regulated activities like selling private placement securities. On average, our Affiliate Partners have several years of experience within the financial industry, have undergraduate and in some cases post-graduate degrees, and hold industry designations such as the Chartered Financial Analyst (CFA), and Chartered Alternative Investment Analyst (CAIA). These qualifications merely demonstrate that the holder of the license and or designation met the testing standards set forth by the sponsor of the license and or the sponsor of the designation. These qualifications do not mean that any individual holder is an expert in any of the content. Item 3. Fees, Costs, Conflicts, and Standards of Conduct – What fees will I pay? You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what commissions and expenses you will be paying. We typically get paid if you purchase a private offering that we have introduced you to on behalf of our private issuer client. We typically get paid a commission which equates to a minority percentage of the fees that the private issuer charges you. This arrangement creates a conflict of interest that you should be aware of. Only when you invest in an offering that we bring to you, do we get paid a commission. How do you financial professionals make money? Stonehaven will take a minority percentage of the commission generated by our Affiliate Partners. This arrangement creates a conflict of interest that you should be aware of. Affiliate Partners consider their fees when selecting private issuers to represent. Only when you invest in an offering, will the Affiliate Partner get paid a commission. In some cases, our Affiliate Partners will collaborate with each other and share commissions. You should understand that we will only introduce you to the private issuers who have engaged us as clients. You can find other private issuers elsewhere who might be better suited to your investment needs or goals. Conversation Starter: Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me? We do not carry customer accounts, and thus we cannot accept your capital to invest. It is important to understand that most private issuers manage investment vehicles that charge fees to the investors who have invested in these vehicles – these fees are referred to as entity-level fees. Stonehaven and its Affiliate Partners typically get paid a commission which can take several forms. First, if an issuer is a private “open-ended” fund, then you will normally pay management and performance fees to the fund over the course of your investment, and typically the fund will pay us a small percentage of the entity-level fees charged to you. Second, if an issuer is a “closed-end” fund, then you will normally pay fees to the fund over the course of the investment timeline for the fund, and typically the fund will pay us a small percentage of the entity-level fees charged to you. Third, if an issuer is a private company, then we are paid a commission relating to a direct transaction. Sometimes the buyer pays this type of commission, and sometimes the seller pays it, and sometimes the buyer and the seller split it. An issuer sometimes pays us in its warrants or equity interests, rather than only in cash. An issuer sometimes pays us a monthly retainer that is an advance, forgivable by the issuer, against future commissions. Each of these arrangements creates conflicts of interest. We invite you to contact us to discuss conflicts and how they specifically apply to your scenario. What are your legal obligations to me when providing recommendations? How else does your firm make money and what conflicts of interest do you have? We are external capital raising agents acting on behalf of our clients, the private issuers. Because of this simple intermediary construct and because we will have no access to your portfolio, you must independently determine if an investment opportunity is suitable in light of your investment goals, risk tolerance, portfolio or similar considerations for sub-advised accounts for which you act as fiduciary. Conversation Starter: How might your conflicts of interest affect me, and how will you address them? We only get paid if you invest in an opportunity that we have brought to you. This arrangement creates a conflict of interest. Moreover, we are paid a transactional commission whether your investment appreciates or depreciates. We have an incentive to present certain investments because the manager or sponsor of those investments shares with us revenue it earns on those investments. Item 4. Disciplinary History – Do you or financial professionals have legal or disciplinary history? Yes, we have legal and disciplinary events. Visit Investor.gov/CRS for a free and simple search tool to research our firm and our financial professionals. Conversation Starter: As a financial professional, do you have any disciplinary history? For what type of conduct? Item 5. Additional Information – We encourage you to seek additional information For additional information about our brokers and services, visit Investor.gov, or FINRA BrokerCheck (BrokerCheck.Finra.org). To report a problem to the SEC, visit Investor.gov or call the SEC’s toll‐free investor assistance line at (800) 732‐0330. To report a problem to FINRA, please call (301) 590-6500. If you would like receive a copy of this relationship summary or if you have any problems with any of our registered representatives or would like to contact us directly, please contact us in writing at [email protected] We do not have a general line to call into. Conversation Starter: Who is the primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
Form CRS Additional Disclosure StatementStonehaven LLC (“Stonehaven”) is providing this information to enhance transparency and provide clarification by disclosing the scope and terms of the brokerage products and services we offer and detail the material conflicts of interest that arise (may arise) in the course of our delivery of these products and services. Each investor’s circumstance is unique, as is each investor’s solution. A critical step in the process is understanding and evaluating the products and services we provide and the related fee structures. This disclosure statement explains the scope of the products and services we provide, the standard of care we observe with respect to such products and services, how we work with you to select products and services that suit your needs, and our compensation for the products and services we offer. We encourage you to review this information carefully, along with any applicable agreement(s) and disclosure documentation and other information that you may receive from us. We hope you find this disclosure statement to be informative. Kindly note that we may make periodic updates to this disclosure statement and as such, we will always provide access to the most current version. You can also view the most current version of the disclosure statement at www.stonehaven-llc.com, or you can always contact Stonehaven’s registered representatives. Section 1: Who We Are Stonehaven LLC (“Stonehaven”) is a registered broker–dealer with the United States Securities and Exchange Commission (“SEC”), a member of the Financial Industry Regulatory Authority (“FINRA”), and the Securities Investor Protection Corp. (“SIPC”). Additionally, Stonehaven is designated as an International Dealer operating under an exemption recognized by the Alberta Securities Commission, the British Columbia Securities Commission, the Manitoba Securities Commission, the Nova Scotia Securities Commission, the Ontario Securities Commission, Authorité Des Marchés Financier (Quebec), and the Financial and Consumer Affairs Authority of Saskatchewan. Stonehaven is also an Introducing Broker Member of the National Futures Association (“NFA”) to facilitate third-party marketing of funds that may contain commodity futures or options on commodity futures. Stonehaven is a global capital raising FinTech platform supporting a diverse community of Affiliate Partners, independent placement agents and investment bankers, in strategically connecting select investment opportunities with an extensive network of investor relationships. Stonehaven actively raises capital for pooled investment vehicles (such as hedge funds and private equity funds), direct deals (such as corporates). Stonehaven also facilitates other types of private market transactions (such as mergers & acquisitions, and pre-IPO secondaries). Stonehaven does not carry any customer accounts or hold any customer funds or securities. You will need to open accounts with other financial institutions to make investments (transact) in products introduced by us. Who We Serve Stonehaven represents private issuers and other participants engaging with investors (such as buyers and sellers) to facilitate private market transactions. How We Serve You We aim to present fair and balanced information, while disclosing any conflicts of interest, regarding any investment opportunities which we are representing in the marketplace. We have built our business by consistently striving to be a well-informed market participant to help us in presenting comprehensive information regarding the private investment opportunities that we represent to our investor relationships. As a US broker-dealer, Stonehaven is subject to a number of laws, rules, and regulations, including the Securities Act of 1933 (the “Securities Act”), Securities Exchange Act of 1934 (the “Exchange Act”), the rules of the SEC, FINRA, the NFA and state securities laws. We also have limited member rights in certain Canadian provinces. Stonehaven’s duties to you include, among others, the following Disclosure Obligations should we make a recommendation: Make full and fair disclosure to you, prior to or at the time of a recommendation, of all material facts relating to:
- The scope and terms of our relationship, specifically in acting in our capacity as a broker-dealer in introducing you to private offerings of the issuers that we represent.
- The costs that apply to any transaction that you may be evaluating based on our introduction.
- If a recommendation, any limitations included by your registered representative(s).
- If a recommendation, any conflicts of interest associated with the transaction, such as those related to compensation
- Understand the potential risks, rewards, and costs associated with a recommendation, and have a reasonable basis to believe that when a recommendation is made, it is in the best interest of our investor relationships generally, even if it may not necessarily be appropriate for you in
- Have a reasonable basis to believe that when a recommendation is made, it is suitable for you based on your investment profile and that the potential risks, rewards and costs associated with the transaction are clear and presented in a fair and balanced manner. Your investment profile includes many data points including but not limited to your risk tolerance, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, and any other information that you may disclose to the registered representative in connection with the transaction. In other words, the more information about your investment profile that you disclose to the registered representative in the connection with the proposed transaction, the more you assist the registered representative in servicing you with a higher degree of precision.
- Have a reasonable basis to believe that, when a series of recommended transactions are made, even if in your best interest when viewed in isolation, are not excessive, are in your best interest when taken together in light of your investment profile, and do not place Stonehaven’s interest ahead of yours.
- Identify, disclose, and when possible minimize conflicts of interest associated with recommendations.
- Identify and disclose any material limitations that apply to the product or service being recommended, such as what investments your registered representative is licensed to recommend, and prevent those limitations from causing the registered representative to suggest an investment that places their interest or Stonehaven’s ahead of yours.
- Identify and eliminate any sales contests or quotas that create a conflict and put Stonehaven’s interests ahead of yours.