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.
Looking to refine your strategy for investing in stocks in the US market? Discover expert insights, key trends, and risk management techniques to maximize your returns
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
The fintech firms' new tools and integrations address pain points in overseeing investment lineups, account monitoring, and more.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
