Feltl & Company Allegedly Failed to Comply with Supervisory Requirements for Broker-dealers; FINRA Fines Feltl $1Million Over Penny Stock Business
Between January 2008 and February 2012, Feltl & Company, headquartered in Minneapolis, Minnesota, declined to comply with the suitability, disclosure, and record-keeping requirements for broker-dealers who operate a penny stock business, a FINRA Letter of Acceptance, Waiver and Consent (AWC) alleges. Feltl failed to disclose customers with the standardized U.S. Securities and Exchange Commission (“SEC”) risk disclosure document two days prior to implementing a penny stock transaction, the AWC notes. FINRA also contends that some customers were not properly notified about the stocks’ suitability and risks, and for not sending customers account statements showing the market value of each penny stock.
Feltl Reportedly Failed to Annually Test and Validate Supervisory Procedures
From 2009 to 2012, Feltl also failed to annually test and verify its supervisory procedures, deliver the required reports, test results, exceptions, and any extra or amended procedures to senior management, and make the required certifications, FINRA alleges. In addition, Feltl was unable to generate to FINRA certain copies of branch offices’ daily trade blotters, the AWC notes.
Feltl Served as Market Maker in 17 Penny Stocks
From January 2008 until February 2012, Feltl was a market maker for 17 penny stocks, 15 of which led to 2,450 purchases, and $2.1 million in markups, markdowns, or commissions, FINRA alleges. In addition, Feltl did not follow the penny stock transactions in securities in which it did not make a market, the AWC reports. The Firm’s penny stock transaction and revenue numbers reportedly are substantial, but the actual numbers are not known.
Investment Fraud Lawyers Investigating
The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.