On September 16, FINRA accepted a Letter of Acceptance, Waiver, and Consent (AWC) from a member firm, settling alleged rule violations made during its participation as a placement agent in a contingency offering.
The firm allegedly failed to promptly return customer funds when the minimum contingency for the offering was lowered — a material change in the offering’s terms that required prompt return of the funds — and therefore violated Section 10(b) of the Securities Exchange Act, Rule 10b-9 and FINRA Rule 2010. Additionally, FINRA alleged the firm’s supervisory system and written supervisory procedures “were not reasonably designed to achieve compliance” with the rules.
To resolve FINRA’s allegations, the firm consented to, among other things, a censure, a $20,000 fine, and remediating the identified issues within 60 days.
