Regal Securities Inc.—Failure to Enforce Procedures Relating to Review and Approval of an Outside Business Activity
Regal Securities Inc. Allegedy Failed to Establish and Enforce Procedures Relating to Approval and Review of an Outside Business Activity
Regal Securities Inc. allegedly failed to establish and enforce procedures relating to its review and approval of an outside business activity, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC) currently under review by attorneys Joe Peiffer and James Booker.
Regal Securities maintained Securities’ written supervisory procedures at the time which required the firm to investigate and review the contents of an outside business activity request before approving or denying the proposed activity, the aforementioned AWC reports.
The AWC further details how the Regal allegedly missed red flags while reviewing and rejecting a registered representative’s request, the AWC notes.
Said red flags allegedly involved the aforementioned rep allegedly ignoring Regal’s decision that he had also allegedly taken steps along with the help of another firm representative to engage in private securities transactions involving a limited liability company, the AWC states.
This behavior was allegedly in connection with brokers Dickie Adcock and Charles Bailey Ferrill, Jr., the AWC notes.
Adcock and Ferrill, Jr. allegedly raised funds for a business plan to operate a hedge fund through two entities, Talon LLC and Talon Capital LP, the AWC states.
Our story begins in March of 2011 when Raymond Adcock, then a registered rep at Regal, allegedly made a written request that he and Ferrill, Jr. obtain permission to take part in a privat placement offering by Talon Capital, the AWC reports.
Said private placement offering allegedly sought to raise about $500,000 in capital from qualified investors through the sale of unsecured notes, the AWC notes.
It is important to note that FINRA Rules prohibit registered reps from taking part in outside business activities unless “he or she has provided prior written notice to the member, in such form as specified by the member”, the AWC states.
FINRA Rules also state that members are instructed to “evaluate whether to impose specific conditions or limitation on the outside business activity, and to evaluate whether the proposed activity is more properly characterized as an outside securities transaction” which is subject to NASD Rules, the AWC notes.
The Peiffer Wolf securities lawyers are currently investigating Regal Securities Inc.’s alleged failure to establish and enforce procedures related to its review and approval of an outside business activity.
Regal Securities Inc. Censured and Fined $25,000 by FINRA for Allegedly Selling Unregistered Securities in Two Separate Offerings Totaling $540,000
Talon Entities allegedly sold unregistered securities in two separate offerings to eight Arkansas investors and six Mississippi investors to individuals, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC) presently being examined by attorneys Joe Peiffer and James Booker.
Said individuals who were either clients of Regal or persons with whom the brokers maintained personal relationships, the AWC reports.
What is more, the aforementioned two offerings allegedly raised a combined total of $540,000 in investor funds, the AWC states.
Adcock, in addition, in 2015, was barred by FINRA for conversion of $10,000 in proceeds produced by the aforementioned private placement offering, the AWC notes.
Adcock also allegedly misappropriated the funds by making a draft of a check which was made payable to “cash” from Ferril’s bank account and converted the funds for his personal use, the AWC states.
As a result of the aforementioned behavior, Regal Securities allegedly failed to comply with its obligations to reasonably supervise Adcock and his outside business activities, and hence allegedly violated NASD and FINRA Rules, according to the AWC.
Therefore, Regal was censured and fined $25,000, the AWC reports.
Regal Securities has no prior relevant disciplinary history and member of FINRA in November 1976 and became registered with the SEC in June 1977, the AWC reports.
Regal also purportedly operates 23 branches and employs approximately 100 registered representatives and its registration with the SEC remain currently in effect, the AWC states.
One should also note that, according to the AWC, Regal Securities neither admitted nor denied the FINRA findings.
Securities Lawyers Investigating
The Peiffer Wolf securities lawyers often represent investors who lose money as a result of alleged outside business activities and are currently investigating Regal Securities Inc.’s alleged failure to establish and enforce procedures related to its review and approval of an outside business activity. 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 Regal Securities Inc.’s alleged failure to establish and enforce procedures related to its review and approval of an outside business activity may contact the securities lawyers at Peiffer Wolf, Joe Peiffer or James Booker, for a free no-obligation evaluation of their recovery options, at 504-523-2434 or via e-mail at firstname.lastname@example.org or email@example.com.