NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

NAME REDACTED BY RRBDLAW.com Principal)
AWC/2008011629601

The Respondent

• raised over $1.5 million from investors through offers and sales of limited partnership interests in a hedge fund, and made numerous misrepresentations in connection with the offers and sales that were inconsistent with the private placement memorandum (PPM); 
• used over $1.3 million of the funds raised to invest in promissory notes issued by private companies in which he had a controlling interest, and made misrepresentations regarding 
  • the fund’s investment strategy, 
  • the concentration of investment funds in particular investments; 
  • the use of funds, and 
  • the amount of management fees and other expenses charged to the fund 
• omitted to timely disclose material facts including that he exercised sole discretion over the fund’s operations;
• misused customer funds received in connection with the fund offering by obtaining debit cards linked to accounts and utilized the cards to pay for personal and non-business related expenses;
• caused funds from the various accounts to be transferred to his personal brokerage account and caused monthly payments for non-business related expenses to be drafted from one of the accounts; and
• failed to properly supervise the activities of a registered representative for whom he had supervisory responsibility, and failed to review the representative’s email correspondence. 

Through his member firm, Respondent conducted an unregistered offering of the securities of an entity for which there was no available exemption due primarily to the offering being conducted pursuant to a general solicitation, and failed to timely disclose to investors that the firm was under common control with the issuer, in that he owned both entities. 

NAME REDACTED BY RRBDLAW.com Principal): Barred