Tag Archive for FINRA

FINRA is the Financial Industry Regulatory Authority, which is a self regulatory organization which is the largest independent regulator for all securities firms operating within the United States. FINRA was formed by a merger of the National Association of Securities Dealers (NASD) regulatory division and the regulatory division of the New York Stock Exchange. FINRA is managed by a Board of Governors. FINRA regulates trading in equities, corporate bonds, securities futures, and options with authority over the activities of more than 5,100 brokerage firms.

FINRA Rule 5123 – Private Placement Filing Requirements

Coral Capital Partners takes a look at recent FINRA Regulatory Notice 12-40 and the underlying FINRA Rule 5123, which requires broker/dealers that participate in the private offerings of issuer securities to file a copy of the private placement memorandum and other offering documents with FIRNA. We also look at the exemptions to this requirement, and were we see areas of risk for broker/dealers participating in private placements. We also look at how we see this tying in with FINRA Regulatory Notice 10-22.

A Look at the Penalties for Broker/Dealer Failure to Obtain Due Diligence Under FINRA 10-22

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.

FINRA’s Sanction of Broker/Dealers for Lack of Conducting Reasonable Due Diligence

FINRA recently issued Regulatory Notice 10-22 which requires broker/dealers to conduct or obtain reasonable due diligence on companies whose securities they sell in private placements through the Regulation D exemption. Coral Capital Partners looks at recent FINRA sanctions of broker/dealers, and their personnel for failure to conduct a reasonable due diligence review of companies for which they raised funds for through private placement sales under Regulation D.