Securities Fraud Lawyer Blog

In October, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that Ken Crosser submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Crosser consented to the sanction and to the entry of findings that he refused to appear for FINRA-requested testimony during the course of an investigation into allegations that he was involved in the sale of structured settlement cash flow instruments to investors without providing his member firm with prior written notice and receiving firm approval to engage in this activity.

 Ken Crosser’s registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration.

In October, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that Walter Chao submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was assessed a deferred fine of $30,000, suspended from association with any FINRA member in any capacity for two years. He was also required to requalify as a general securities principal by taking and passing the Series 24 examination prior to associating with any FINRA member firm as a general securities principal following his suspension.

Without admitting or denying the findings, Walter Chao consented to the sanctions, and to the entry of findings that he participated in private securities transactions totaling $1.27 million without his firm’s approval. The findings stated that Chao had requested approval but the firm denied his request.

The findings also stated that Chao took steps to conceal his participation in the private securities transactions from his firm. Chao regularly used an unapproved email address for communications related to the transactions with the selling firm. In addition, Chao provided false and misleading answers in his firm’s compliance questionnaire by stating that he had not participated in any private securities transactions, and failed to disclose his use of an unapproved email address. The findings also included that Chao provided false and misleading statements to FINRA regarding his involvement in the private securities transactions.

In October, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that H. Beck submitted a Letter of Acceptance, Waiver and Consent (AWC) in which the firm was censured and fined $40,000.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to enforce its written supervisory procedures regarding on-going due diligence. The findings stated that H. Beck’s written supervisory procedures provided that the firm would conduct an ongoing review of the companies with which it maintained a business relationship, and would report any significant developments to senior management.

However, the firm failed to conduct adequate ongoing due diligence on three private placement funds. The findings also stated that the firm failed to detect and investigate the deterioration of the financial condition of the funds and the funds’ investment adviser.

In October, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that Cedar Point Capital submitted a Letter of Acceptance, Waiver and Consent (AWC) in which the firm was censured and fined $10,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it willfully violated Securities Exchange Act of 1934 Rule 10b-9 by reducing the minimum amount of funds required to close a private placement without first returning all escrowed funds to subscribers.

Cedar Point Capital’s registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration. Cedar Point Capital is registered with the SEC, one self regulatory organization and in 17 states. According to FINRA’s CRD disclosure report, Cedar Point Capital has been the subject one regulatory investigation.

In October, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that Braymen, Lambert and Noel Securities submitted a Letter of Acceptance, Waiver and Consent (AWC) in which the firm was censured and fined $70,000. Without admitting or denying the findings, BLNS consented to the sanctions and to the entry of findings that the firm failed to supervise its private placement securities business and the activities of registered representatives located in two of its branch offices.

The findings stated that the firm, acting through Ms. Braymen, failed to register two branch office locations and failed to conduct and adequately document branch office inspections. FINRA found the firm failed to document the testing and verification of its policies and procedures. In addition, the firm and Ms. Braymen failed to maintain a schedule for compliance inspections of its non-branch offices and maintained inadequate supervisory systems and written supervisory procedures regarding scheduling such inspections.

The findings also included that the firm failed to capture, review and retain certain email correspondence, and failed to enforce its written supervisory procedures regarding documenting reviews of other email correspondence.