Securities America, Inc. has entered into a settlement with the Financial Industry Regulatory Authority (FINRA) and will pay a fine of $100,000 in connection with the sale of two private placements. As part of the settlement, Securities America agreed to the following findings:
- The firm failed to have a supervisory systems in place designed to identify misrepresentations or misleading statements made to customers regarding two private placements: (1) the IMH Secured Loan Fund and (2) Medical Provider Funding Corporation (aka “Medical Capital”).
- Securities America’s email monitoring system failed to identify several emails that misrepresented the liquidity and safety of the IMH Secured Loan Fund.
- One particular email exaggerated the safety of IMH by describing it as a “very safe, sleep at night investment.”
- Other emails used the words “principal protection” in describing the risk to principal for both IMH and Medical Capital.
In addition to the $100,000 fine, Securities America must conduct a comprehensive review of its supervisory system and make necessary revisions to prevent similar violations.