As a result of a FINRA investigation, Park Avenue Securities LLC was recently censured and fined $175,000.
Without admitting or denying the findings, Park Avenue Securities consented to the described sanctions and to the entry of findings that it conducted an inadequate investigation of its representatives’ involvement in a Ponzi scheme and of allegations two registered representatives made.
The findings stated that Park Avenue Securities became aware that two of its registered representatives had participated in unapproved private securities transactions by facilitating investments in the Ponzi scheme for themselves and others, some of whom were firm customers, without notifying the firm or obtaining its permission. According to FINRA’s findings, Park Avenue Securities apparently initiated an investigation regarding these representatives’ conduct and to determine whether any other registered representatives were involved in the Ponzi scheme.
As part of the investigation, the findings state that the firm sent a questionnaire to its registered representatives in two states soliciting information about any involvement in the Ponzi scheme. Notwithstanding the allegation two registered representatives made that one of the firm’s insurance supervisors knew about their involvement with the Ponzi scheme, the firm permitted him to be one of the people collecting responses to the firm’s questionnaire.
The findings also included that the firm failed to fully investigate the extent of the insurance supervisor’s involvement with the Ponzi scheme despite evidence discovered later that should have led the firm to conclude that he was involved.
FINRA also found that counsel for the two registered representatives informed the firm that a member of the firm’s supervisory staff had suggested that the registered representatives destroy documents and provide misleading information in connection with Park Avenue Securities’ internal investigation.
Based on the foregoing, FINRA found that Park Avenue Securities took inadequate steps to investigate these allegations.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
If you have questions about investments you made with Park Avenue Securities LLC, the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, please call the firm’s Chicago office at 312/238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
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