A Florida-based firm has been penalized by the Financial Industry Regulatory Authority following allegations it deceived investors, InvestmentNews reports.
National Securities Corp. reached a settlement with FINRA to pay a $300,000 fine along with $363,447.67 in disgorgement plus interest while also consenting to a censure. The firm did not admit or deny the findings contained in the letter of acceptance, waiver and consent.
FINRA stated that in December 2017 and January 2018, National Securities sold a “pre-IPO” private placement offering managed by its affiliated investment advisor. The firm allegedly deceived investors by offering interests in a private company (‘Company A’) at a price not to exceed $9.75 per share, even though NSC had not located shares available at that price. “The offering eventually purchased shares in Company A at more than double the maximum price listed in the offering documents,” FINRA said.
The authority said the conduct of National Securities had contravened Section 17(a)(3) of the Securities Act of 1933, thus violating FINRA Rule 2010. In addition, NSC was found to have failed to reasonably enforce its written procedures concerning the offering of “pre-IPO” shares and failed to reasonably supervise the head of its private share business, in violation of FINRA Rules 3110 and 2010.
National Securities has 630 registered representatives and 130 branch offices, and is headquartered in Boca Raton, Florida.
The attorneys at Lewitas Hyman understand the complexities that come with being the subject of a regulatory inquiry. We were formally senior attorneys in the SEC’s Division of Enforcement and have represented clients in regulatory matters while working at Morgan Stanley and in private practice at some of the world’s largest law firms. Therefore, we have the experience to guide and advise you through any type of regulatory investigation. If you are the subject of a regulatory proceeding, contact us at (312) 291-4600 or through our online contact form for a free consultation.