Securities Lawyers Blog
Currently financial advisor Gary Arnold (Arnold), currently employed by brokerage firm Investment Network, Inc. has been subject to at least one disclosable event. These events include one tax lien. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.
FINRA BrokerCheck shows a final customer complaint on October 16, 2024.
Without admitting or denying the findings, the firm and Arnold consented to the sanctions and to the entry of findings that the firm and Arnold failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with Reg BI and FINRA rules relating to the sale of private placements and identifying and addressing potentially excessive trading. The findings stated that Arnold failed to update the firm WSPs to include any written policies and procedures regarding private placements and as a result, did not designate a supervisor with responsibility for supervising private placement offerings. The firm’s WSPs do not provide guidance about how to identify accounts that are excessively traded. Further, the firm has no reports or alerts designed to identify factors that would indicate excessive trading, instead relying primarily on a daily, manual trade-blotter review. As a result, the firm willfully violated Reg BI by failing to comply with Reg BI’s Compliance Obligation, set forth at Exchange Act Rule 15l- 1(a)(2)(iv). The findings also stated that the firm and Arnold failed to establish written policies and procedures reasonably designed to achieve compliance with Reg BI. Despite awareness of Reg BI’s June 30, 2020, implementation date, Arnold never updated the firm’s WSPs to include policies or procedures regarding compliance with Reg BI’s requirements. Therefore, the firm willfully violated Reg BI by failing to comply with its compliance obligation.
