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.

EDI Financial, Inc.
AWC/2009016266601

EDI Financial acted as the sole placement agent for contingency offerings, and entered into agreements with an independent attorney to act as the independent administrator for the offerings rather than contracting directly with a bank to act as the firm’s escrow agent. The title of the first offering escrow account, which the attorney opened, did not change even after the offering had been closed and the new offering was instituted, and the firm never broke escrow before meeting the contingency for both offerings. The firm established a bank account to hold funds related to the offerings separately, and the account was administered by an independent party. The Firm failed to timely deposit customers’ check into the escrow account after receipt.

EDI Financial, Inc.: Censured; Fined $10,000

Tags: Contingency Offering  Escrow