For me Series LLCs are an enigma. It is not clear to me why one would take on the uncertainty that Series LLCs face when you can accomplish just about the same thing with multiple LLCs owned by a holding LLC.
In this regard the SEC released on September 1, 2009 a staff opinion shooting down the use of a Series LLC with respect to a broker-dealer arrangement in which the Master Series LLC would have no assets but would create two series, one for retail operations and the other for institutional customers.
The Financial Industry Regulatory Authority (FINRA) asked the SEC to bless such an arrangement. Because the structure would run afoul of capital requirements and several financial disclosure regulations, the SEC rejected the idea. Rather than go into the details I'll attach the relatively brief letter here in a little while.
-Marc Ward
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