The Financial Industry Regulatory Authority Inc. said Wednesday that it had sanctioned National Securities Corp. $663,000 for deceiving investors in December 2017 and January 2018 about the price of shares as part of a private placement offering.
National Securities Corp., which has 630 registered reps and is based in Boca Raton, Florida, will pay a $300,000 fine and $363,000 in disgorgement, plus interest, in the matter.
As part of the settlement, National Securities neither admitted or denied Finra's findings.
A company spokesperson didn't return phone calls on Friday to comment.
Over the two-month period, National Securities sold a so-called “pre-IPO” private placement offering managed by its affiliated investment adviser.
In connection with that offering, the firm deceived investors by offering interests in a private company at a price not to exceed $9.75 per share, even though the firm had failed to locate shares available at that price, according to Finra.
The offering eventually purchased shares in the company in question at more than double the maximum price listed in the offering documents, according to Finra, which is a violation of industry rules.
National Securities also failed to reasonably enforce written procedures concerning the offering of “pre-IPO” shares and failed to reasonably supervise the head of its private share business, also in violation of industry rules, according to Finra.
At the end of December, National Securities reported to the Securities and Exchange Commission that it had accrued close to $4 million for legal matters as of the end of last year’s third quarter, or four times the amount it had set aside at the same time a year earlier.
Supervision vice chair speaks following recent launch of AI adoption practices by regulators.
In an era of AI euphoria and market FOMO, getting back to basics with fixed income may be the most contrarian and most important move advisors can make.
Voya Financial adds private equity, credit and real estate options to its AMA program, building on support for looser federal investment rules in retirement accounts.
Shannon Reid, president of Osaic and the network’s number two executive, has plenty of challenges, industry executives said.
Auditors flagged the commingling. The COO allegedly knew. Investors kept getting the pitch
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
