Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, Boustead Securities, LLC (CRD # 141391) was recently sanctioned by FINRA’s Department of Enforcement after an investigation of its supervisory system relating to customer participation in private placement offerings.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Boustead Securities, LLC.
Registration Background for Boustead Securities, LLC
Boustead Securities, LLC has been a member firm of FINRA since 2007. It is headquartered in Irvine, CA. It is an investment banking firm that has two branch offices with approximately 50 registered representatives.
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated November 14, 2022 (No. 2019060735601), Boustead Securities, LLC consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From March 2018 through March 2020, Boustead’s [written supervisory procedures] required the use of new account forms to collect and record customer and investment profile information, but Boustead did not enforce this procedure with respect to certain customers in certain private placement offerings”;
- “In practice, Boustead did not require the use of new account forms for customers participating in private placements. Instead, the firm collected customer information through other methods such as an issuer-specific subscription agreement, the registration process conducted through an affiliated crowd funding portal, or an accredited investor questionnaire”;
- “The firm’s [written supervisory procedures] did not address the collection of customer information through a crowd funding portal and did not provide any guidance as to the content of subscription agreements or accredited investor questionnaires or require them to solicit any specific customer information”;
- “In each sampled private placement transaction for this period, Boustead failed to collect at least one component of the customer and investment profile information required by Exchange Act Rule 17a-3 or FINRA Rules 4512 and 2111”;
- By virtue of its actions, Boustead Securities, LLC violated FINRA Rule 3110 regarding supervision, FINRA Rule 5110 regarding corporate financing; and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA Sanctions Boustead Securities, LLC
As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s November 14, 2022 AWC also indicates that Boustead Securities, LLC consented to the following sanction(s):
- A censure; and
- A fine in the amount of $35,000.00.
Boustead Securities, LLC Has A History of Customer Complaints
In addition to Boustead Securities, LLC being sanctioned by FINRA after an investigation of its supervisory system relating to customer participation in private placement offerings, FINRA BrokerCheck for Boustead Securities, LLC reveals it has a prior history of customer-initiated complaints and/or arbitrations, including but not necessarily limited to the following:
- On October 16, 2020 a plaintiff in an action in the U.S. Bankruptcy Court for the Western District of Pennsylvania named Bousted Securities, LLC as a defendant. The customer alleged excessive commissions. The matter is currently pending.
- On December 6, 2008 a plaintiff in an action in the Court of Common Pleas of Allegheny County Pennsylvania named Bousted Securities, LLC as a defendant. The customer alleged false representations about the issuer of a private placement security. The matter is currently pending.
If you or someone you know has or had a brokerage account with Boustead Securities, LLC and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.