FINRA Rule 2110

In April 2013, the Financial Industry Regulatory Authority (FINRA) requested that Eric Foster (Foster) provide information concerning possible securities laws violations. By July 2013, Foster failed to respond to FINRA’s requests and imposed a permanent bar from the securities industry.

The FINRA bar isn’t the first time Foster has been sanctioned by FINRA. In February 2012, Foster settled charges that he violated FINRA Rule 2110 by effecting unauthorized transactions in the account of a deceased customer. In so doing, Foster exercised discretion in the customer’s account without written authorization. The settlement resulted in a $12,471 fine and restitution and a three month suspension. In December 2011, Foster settled charges brought by Illinois Securities Department concerning allegations that he churned the account of a senior citizen earning large commissions for himself while reducing the equity in the account to zero

Foster was a registered representative of Halcyon Cabot Partners, Ltd. from July 2010 through June 2012. Previously, Foster was associated with Arjent Services, LLC from October 2010, until July 2010. Foster was also associated with Maxim Group LLC from October 2002 until October 2008.

John S. Turo (a/k/a James S. Turo) recently reached a settlement with the Financial Industry Regulatory Authority (FINRA) concerning allegations that he sold unregistered, nonexempt securities through general solicitation of the public in violation of Section 5 of the Securities Act of 1933 and in violation of NASD Rule 2110 and FINRA Rule 2010. The FINRA settlement result in a fine of $20,000. Turo became a registered securities representative and principal in 2003. From May 2005 until April 2007, Turo was associated with Innovation Capital, LLC. Starting in 2001, Turo was also associated with GT Securities, Inc. (GT Securities a/k/a Growthink Securities, Inc., Growthink, Inc., GTK Partners). Turo is the Managing Director and Chief Compliance Officer of GT Securities.

From 2008 and through 2010, Growthink issued securities to raise capital for GT Securities. In order to raise the capital, Turo sold private placements investments in Growthink to approximately 46 investors totaling $2,611,124. FINRA alleged that the private placement sales were nonexempt securities offerings that violated Rule 506 of Regulation D requiring registration and prohibits general solicitation of the investment to the public.

In order to sell the Growthink securities, FINRA alleges that Turo held webinars online on topics such as strategic business planning, entrepreneurship, and private equity investing that included general solicitations for investments in Growthink. The webinars were open to the general public. In addition, investors did not need a pre-existing relationship with Growthink or Turo in order to register and participate in the webinars. Thus, the webinars lacked a pre-screening process in order to limit the participants to only those who would qualify as accredited investors under the securities laws governing the sale of private placements. FINRA’s complaint alleged that the foregoing sales practices and the private placement offering itself violated various securities laws.

Articles Tagged with FINRA Rule 2110

Eric Foster Accused of Unauthorized Trading and Churning Customer Accounts

John S. Turo Settles With Regulatory Agency Concerning Allegations of Selling Unregistered Securities