FINRA Launches New Wave Of Private Placement Crackdowns

Wednesday, November 30, 2011 08:08
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FINRA Launches New Wave Of Private Placement Crackdowns

Tags: FINRA

Aggressive sales of privately placed securities have already destroyed several brokerage firms or forced their sale. FINRA's probe into the assets is widening and may trigger another round of firm closures.

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The latest round of enforcement will return $3.2 million to aggrieved clients and imposes some relatively minor fines on ten firms and eight individuals who sold them.

 

Securities America, which has already suffered through massive arbitration of client claims related to its private placement sales, fared worst with a $250,000 fine.

 

FINRA warns that it continues to look closely at private placement sales, especially when firms fail to show that they're exercising proper due diligence into these securities before selling them.

 

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