FINRA Sanctions Two Firms and Seven Individuals for Selling Private Placements Without Conducting a Reasonable Investigation

FINRA News Release

April 7, 2011

FINRA announced that it sanctioned two firms and seven individuals for selling interests in private placements without conducting a reasonable investigation. The FINRA actions allege that the firms failed to conduct proper due diligence on the offerings to ensure that they were suitable for their customers, and that they failed to enforce a supervisory system reasonably designed to achieve compliance with securities laws and regulations.

Cross References

NASD Rule 2110 (n/k/a FINRA Rule 2010)

NASD Rule 3010