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: 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’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.