Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, Torch Securities, LLC (CRD # 133642) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its failure to supervise and conduct reasonable due diligence.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Torch Securities, LLC
Registration Background for Torch Securities, LLC
Torch Securities, LLC has been a member firm of FINRA since 2005. It is headquartered in Sugar Land, TX and has one registered representative. It conducts a business of investment banking, and mergers & acquisitions work and private placements offered to retail customers.
FINRA’s Allegations Against Torch Securities, LLC
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated May 6, 2022 (No. 2019062311702), Torch Securities, LLC consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “Between January 2019 and November 2019, Torch Securities’ written supervisory procedures required that the firm, before it recommended a private offering to any customer, conduct an investigation and complete a due diligence checklist related to several areas of review, including the issuer’s management, business prospects and plan, assets, and use of offering proceeds”;
- “[Torch Securities’] procedures, however, did not include any discussion of red flags that might arise in the due diligence process or how the firm would address red flags”;
- “Nor did the procedures provide any guidance on how to perform reasonable due diligence when investigating private placements before offering and recommending them to customers”;
- “Between January 2019 and November 2019, Torch Securities approved and recommended three private placement offerings for sale to customers”;
- “[Torch Securities] failed to conduct and document reasonable investigations of the offerings before recommending these securities to customers”;
- “[Torch Securities], rather than conducting an independent investigation, relied almost exclusively on documentation and information the issuers provided”;
- “[Torch Securities] also failed to detect that the offering documentation contained multiple contradictory claims related to the current and projected revenue of the projects, as well as valuation estimates”; and
- By virtue of its actions, Torch Securities, LLC violated FINRA Rule 3110 regarding supervision and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA Sanctions Torch Securities, LLC
As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s May 6, 2022 AWC also indicates that Torch Securities, LLC consented to the following sanction(s):
- A censure;
- A fine in the amount of $17,500.00; and
- Written certification that it has implemented supervisory systems and written supervisory procedures reasonably designed to address the deficiencies identified in the AWC.
Torch Securities, LLC Has No History of Customer Complaints
In addition to Torch Securities, LLC being sanctioned by FINRA after an investigation into its failure to supervise and conduct reasonable due diligence, FINRA BrokerCheck for Torch Securities, LLC reveals it has no prior history of customer-initiated complaints and/or arbitrations.
If you or someone you know has or had a brokerage account with Torch 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.