Valmark Securities, Inc. (CRD #31243, Akron, Ohio) recently submitted an Offer of Settlement in which the firm was censured and ordered to pay $350,000 in restitution to investors.
Without admitting or denying the allegations, the firm consented to the described sanctions and to the entry of findings that the firm approved an offering for sale based exclusively on its review of the issuer’s unverified and uncorroborated statements in the offering document.
The FINRA findings further stated that the firm designated an individual to conduct the marketing review for the offering. The individual created a summary page by cutting and pasting language directly from the private placement memorandum (PPM), including a statement about the unblemished payment history of the offering’s affiliates. The individual then completed, signed and dated the requisite 18-question review checklist.
The FINRA findings also stated that the firm, designated an associated person of the firm to conduct the due-diligence review of the offering. The person had not heard of the issuer prior to receiving the PPM and the other individual’s summary report, so he used the summary report and the PPM to conduct the due diligence review, including his assessment of the risks of the offering, and completed, signed and dated the requisite 14-question due diligence review checklist.
Finally, FINRA found that the firm ignored red flags and failed to adequately supervise the sale of the offering after learning about liquidity issues, and failed to suspend sales based on a PPM containing false statements.
Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on an investment prior to offering it for sale to its clients.
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 Valmark Securities, Inc. 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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