Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer/investment adviser, Growth Capital Services, Inc. (CRD # 124658) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its handling of private placement offerings.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Growth Capital Services, Inc. and any securities purchased through private placement offerings.
Registration Background for Growth Capital Services, Inc.
Growth Capital Services, Inc. has been a member of FINRA since 2003 with its main office located in San Francisco, CA. The firm has 18 branch offices with approximately 80 registered representatives. It offers both broker-dealer and investment advisory services. Its primary business is private placement offerings of securities.
FINRA’s Allegations Against Growth Capital Services, Inc.
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated January 15, 2021, Growth Capital Services, Inc. consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From June 2018 to June 2020, Growth Capital distributed or made available to potential investors various presentations, websites, offering documents, and other materials related to seven different private placement offerings”;
- “The communications violated the content standards of FINRA Rule 2210(d)(1)(A) and (B) by failing to provide a sound basis for evaluating the proposed investments, and by containing … misleading statements”;
- “[O]ne offering failed to include reasonable disclosures about risk in the business plan attached to its private placement memorandum; specifically, that the offering was speculative, illiquid, and could result in a total loss of the investment”;
- “[T]wo offerings presented information from less risky investments such as publicly traded securities or bonds but failed to disclose the material differences between the private placements and the less risky investments”;
- “[O]ne offering described itself as having enhanced liquidity, when in fact it was an illiquid investment”;
- “[O]ne offering included a misleading description of the use of funds, suggesting that the investor would be directly investing in technology companies, when in reality the monies were being invested in another Limited Liability Company that purportedly invested in technology companies”;
- “Five of the offering materials also contained projections of performance in violation of FINRA Rule 2210(d)(1)(F)”; and
- By virtue of his it’s actions, Growth Capital Services, Inc. violated FINRA Rule 2210, regarding communications with the public and FINRA Rule 2010, regarding principles of trade and standards of commercial honor.
FINRA Sanctions Growth Capital Services, Inc.
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s January 15, 2021 AWC also indicates that Growth Capital Services, Inc. consented to the following sanction(s):
- A censure; and
- A fine in the amount of $35,000.00.
Growth Capital Services, Inc. Has a Prior History of Regulatory Action
In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Growth Capital Services, Inc. reveals it has a history of regulatory action regarding private placement offerings. In 2017 it entered into an AWC with FINRA, dated September 29, 2017, after an investigation into its failure to establish and implement an adequate supervisory system for its private placement offerings during the period between October 2008 and April 2013.
Growth Capital Services, Inc. has No History of Customer Complaints
In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Growth Capital Services, Inc. reveals it has no history of customer complaints and/or customer initiated arbitrations.
If you or someone you know has or had a brokerage account with Growth Capital Services, Inc. and have concerns regarding losses in your investments, including private placement offerings 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.