National Securities Corporation-Failure to Disclose Compensation of Private Placements

investor rights lawyersNational Securities Corporation Failed to Disclose to Customers Exact Compensation in Connection to Sale of Private Placements Offered by Parent Company, National Holdings

National Securities Corporation (NSC) allegedly offered two private placements on behalf of its parent company, National Holdings without properly disclosing to customers the exact compensation, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC). The offerings concluded in January and August, 2013, respectively.

NSC sales allegedly brought in $8,835,477 for the offering that ended in January 2013, and the efforts for the August 2013 offering raised $3,175,000, according to the AWC. In the end, NSC received compensation of $212,291 and 100,090 restricted shares of National Holdings for the January offering, and $158,750 for the August offering, the AWC notes. This compensation was reportedly not disclosed to investors.

National Securities Corporation Allegedly Violated FINRA Rules, Censured and Fined $20,000

NSC allegedly violated FINRA Rules which require that a member firm that engages in a private placement of its own securities or those of a control entity to comply with certain disclosures, filing requirements, and limitations on use of proceeds. Under said FINRA Rules the member firm must disclose in writing to investors the amount of selling compensation that will be paid to the firm, the AWC reports.

NSC allegedly failed to make these disclosures. As a result of the foregoing conduct, NSC was charged with violating the FINRA Rules and has been censured by FINRA and fined in the amount of $20,000.

The Peiffer Rosca Wolf Securities Lawyers Represent Victimized Investors

The Peiffer Rosca Wolf investor rights lawyers often represent investors who are victim of investment-related misconduct or fraud. 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 with an investment where broker compensation was not properly disclosed may contact the investment rights lawyers at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1225 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.