Rodman & Renshaw Launches DirectMarkets

New York - 21 March 2012

  • First-Ever 24/7 Automated Electronic Transaction Platform to Link Issuers with Investors for Primary Offerings of Securities by Existing Publicly-Traded Companies
  • Kevin Lupowitz Recruited as CEO of DirectMarkets

Rodman & Renshaw Capital Group, Inc. (Nasdaq: RODM), via a new subsidiary, DirectMarkets, will unveil an automated state-of-the-art electronic transaction platform to directly link existing public company issuers and investors seeking to transact primary offerings of securities. DirectMarkets will bring unprecedented, cost-efficient access to the capital markets into the C-Suite of public companies and bypass certain traditional roles typically held by investment banks that presently control the transactional process. Both investors and issuers will benefit from 24/7 seamless access to DirectMarkets’ platform through a graphical user interface (GUI) accessible via a desktop or laptop computer, as well as any mobile smart devices such as tablets or smartphones.

With its many features, the DirectMarkets platform will empower issuers to sell shares (covered by a shelf registration) directly into the secondary market and to complete funding transactions at a fraction of the current cost. Using the same platform, investors will be able to directly contact issuers, with effective shelf registrations in place, to indicate their interest in buying that issuer’s stock, effectively gaining the ability to accumulate stock positions in a more cost-effective manner than through on-going open market purchases.

Suitable for companies listed on NYSE, NYSE Amex and NASDAQ, as well as unlisted OTCBB companies, the DirectMarkets platform is designed to bring greater efficiency and cost savings to current methods that public companies use to effect financings, including follow-on offerings, Registered Directs (RDs,) At-the-Markets (ATMs), Confidentially Marketed Public Offerings (CMPOs) and Private Investments in Public Equities (PIPEs). Adaptation of the platform across international markets will also be pursued by DirectMarkets.

To lead DirectMarkets, Rodman has recruited Kevin Lupowitz as Chief Executive Officer of the DirectMarkets operating entity. Before joining DirectMarkets, Mr. Lupowitz, age 42, was the Chief Information Officer at FXall, a leading electronic foreign exchange platform. Previously, he was a founding employee of Liquidnet, the global institutional trading network, where he was also Chief Information Officer.

By providing added efficiencies that link issuers with purchasers of securities, while substantially reducing related fees and expenses because of the limited role of intermediaries, the DirectMarkets platform is positioned to be the catalyst for a major paradigm shift in the securities industry. As Edward Rubin, Chief Executive Officer of Rodman & Renshaw, explained: “DirectMarkets is an outgrowth of Rodman’s continual evolution and desire to lead, innovate and service the capital needs of both issuers and investors. We have always recognized the need to be swift in adapting to changes in financing approaches and marketplace requirements. DirectMarkets will be a game-changer and with Kevin Lupowitz’s talent and experience at the helm, this new electronic transaction platform is the catalyst that will redefine Rodman as an innovative technology company focusing on the financial services industry, while strengthening our legacy business.”

The DirectMarkets platform will complement Rodman’s various other business activities, including its market making, sales & trading, research, investment banking, and conferences. In assessing the multiple advantages, Mr. Lupowitz added, “I look forward to heading DirectMarkets. Rodman already has a solid foundation of thousands of potential issuers and investors. DirectMarkets will capitalize on those existing relationships to provide issuers with efficient access to market demands. We will have a unique competitive advantage as the platform gains traction and we begin the process of easing issuers and investors through the transition from manual transactions to our new automated platform.”

In conjunction with the launch of DirectMarkets, Rodman & Renshaw Capital Group, Inc. intends to change its name to Direct Markets Holdings Corp., subject to stockholder approval at its 2012 Annual Meeting of Stockholders scheduled to be held on May 4, 2012. Rodman’s sales & trading and investment banking operations will continue to be conducted by Rodman & Renshaw, LLC.

DirectMarkets Key Features

The DirectMarkets platform’s functionality will include:

• 24/7 seamless access to the DirectMarkets portal through a graphical user interface (GUI) utilizing a desktop or laptop computer, or any mobile smart device such as a tablet or smartphone. Providing Execution Management System (EMS) and Order Management System (OMS) integration for primary offering transactions.

• Connectivity among public companies, institutional investors and sell-side firms to facilitate the purchase and sale of securities, typically off an issuer’s existing shelf registration. Matching secondary market demand (i.e., investor demand typically fulfilled through transactions effected on exchanges or alternative trading systems) with a new source of supply: primary offerings of securities by existing publicly traded companies (i.e., direct purchases from issuers) utilizing reverse inquiry processes. Enabling investors to express interest directly to an issuer in its securities, becoming a catalyst for a potential transaction.

• Workflow management tools for complex financing transactions beyond the standardized offerings of common stock at an agreed-upon price. Automating and standardizing the closing process for capital markets transactions from engagement letter through document negotiation, allocation and settlement resulting in significantly reduced costs and transaction expenses for the issuer.

• Seamless management of ATMs by issuers through the DirectMarkets portal, efficiently selling securities directly into trading markets, reducing costs and taking advantage of market trends and opportunities.

• Ability for issuers to seamlessly manage and monitor open-market buy-back programs through the DirectMarkets portal.

• Connectivity among holders of large blocks of an issuer’s securities and interested purchasers, enabling such purchasers to identify and contact such holders directly, and providing venture capital firms, private equity firms, chief executive officers and other senior executives with additional opportunities to monetize their holdings. Enabling executives to sell 144 restricted and control securities into a trading market in compliance with holding period, volume restriction and manner of sale regulations.

• Providing an issuer-managed social networking platform where issuers can communicate directly with investors on a targeted or non-discretionary basis through interactive (e.g., blogs, twitters, virtual tours, etc.) and static content (e.g., press releases, regulatory filings, etc.), and providing investors with a centralized destination to access information across their target companies. Providing issuers with the functionality to conduct electronic non-deal road shows with qualified investors.

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