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.