FINRA Regulatory Notice 10-22 requires broker/dealers to conduct or obtain reasonable due diligence on companies whose securities they sell in private placement transactions through the Regulation D exemption. Coral Capital Partners looks at the penalties FINRA recently imposed upon broker/dealers and registered individuals for their failure to conduct reasonable due diligence in accordance with FINRA Regulatory Notice 10-22 on companies for which they are raising funds through a private placement offering.
Tag: Capital Financial Services
Capital Financial Services, Inc. is a broker/dealer based in Minot, North Dakota. In 2011, the firm was sanctioned by FINRA for failure to conduct proper due diligence in connection with an offering of private placement securities as required by FINRA Regulatory Notice 10-22. It should be noted that other than this particular instance, Capital Financial Services has had a clean regulatory record. We have no information to indicate that Capital Financial Services has ever been subject to any other regulatory issues or problems