A broker-dealer settled FINRA charges for conduct failures while acting as a placement agent on behalf of an issuer for a contingency offering of securities.
FINRA found that, while acting as a placement agent during an offering, the broker-dealer violated SEA Rule 15c2-4 ("Transmission or Maintenance of Payments Received in Connection with Underwritings"), SEA Rule 10b-9 ("Prohibited Representations in Connection with Certain Offerings") and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade"). FINRA alleged that the broker dealer failed to (i) place investor funds into a bank escrow account (as required under rule guidance on broker-dealers operating with a minimum net capital requirement of $5,000) and (ii) return funds to investors in a timely manner after the required minimum contingency was not met by a specified date.
To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $15,000 fine.
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