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FINRA Sanctions BrokerBank Securities Over Alleged Supervisory Failures

BrokerBank Securities Public records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on October 4, 2018 indicate that Minnesota-based broker-dealer firm BrokerBank Securities was recently sanctioned by FINRA in connection to alleged rule violations. Fitapelli Kurta is interested in hearing from investors who have complaints BrokerBank Securities (CRD# 10641).

Established in Minnesota in 2003, BrokerBank Securities is headquartered in Minnetonka, Minnesota and registered with nine US states and territories: Arizona, California, Florida, Georgia, Michigan, Minnesota, Ohio, Texas, and Utah. According to the firm’s BrokerCheck report, it has been involved in three regulatory events.

In September 2108 FINRA sanctioned BrokerBank Securities in connection to allegations it failed to perform and record reasonable due diligence of a private placement security sold by a firm representative and additional allegations that its supervisory system was not reasonably designed to ensure compliance with due diligence obligations. According to FINRA’s findings, the firm’s written supervisory procedures required it to meet certain due diligence standards that assessed an issuer’s offering prior to the firm’s agreement to participated in that offering. The findings go on to state that the firm “served as a placement agent for a Regulation D private placement offering of securities issued by a corporation,” and the corporation raised a little more than $2.5 million in that offering, “of which $2,220,000 was raised by the firm’s sales to 24 accredited investors.” However, the firm allegedly “failed to conduct a reasonable due diligence investigation of the corporation, and also failed to document the findings of its due diligence investigation.” It also allegedly failed to obtain and document certain customer information which it was required to obtain. In connection with these and other findings, the firm was censured and issued a fine of $5,000.

In 2017 regulatory authorities in Hawaii sanctioned the firm in connection to allegations it sold unregistered securities at a time when it was not registered in the state. The firm was issued a fine of $12,500 and barred from applying for registration in Hawaii for a period of three years.

In 2016 FINRA sanctioned the firm in connection to allegations it disseminated “misleading press releases” that falsely implied the firm authored research reports of certain companies. FINRA’s findings also stated that “acted as a conduit for a non-registered entity which paid the firm a fee to submit the press releases to a newswire service” and that some of these releases did not disclose that the firm had been paid to disseminate them. FINRA’s findings stated that in other cases, the releases and reports “were misleading” in that they did not disclose negative information about the companies they concerned, for instance that “they were subject to ‘going concern’ qualifications by their auditors.” In connection with these and other findings, the firm was censured and issued a fine of $15,000.

If you or someone you know has lost money investing with BrokerBank Securities, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.