The Financial Industry Regulatory Authority (FINRA) has posted a Letter of Acceptance, Waiver, and Consent, according to which the Dalmore Group has been fined $40,000 for supervisory violations in private placement investments.
The failures pertain to a period between March 2017 and December 2018. It appears that Dalmore was unable to comply with FINRA rules regarding supervision as it did not have a system in place that was designed to ensure compliance.
Reasonable due diligence is expected to be conducted by a broker-dealer prior to offering a private placement to its customers as a recommended investment.
According to FINRA’s findings, Dalmore appears to have failed in this duty for two private placements that were offered and sold to customers during this period. Not only did the firm not review business plans, industry prospects, models, possible regulatory issues, and competitive positioning of the issuer independently, they seem to have relied almost exclusively on the information and collateral provided by the issuers themselves, alleges FINRA.
Material information regarding the suitability of the investment, as a result, could not be unearthed by the firm. As highlighted by FINRA, for one of the offerings, Dalmore did not know that securities-related litigation was underway against a key director and officer of the issuer.
The firm was also found negligent in not submitting offering documents within 15 days of the date of the first sale to FINRA between April 2017 and February 2019, for 26 separate private placements.
Headquartered in Woodmere, NY, Dalmore Group, Inc. (CRD No. 136352), is primarily an investment bank, dealing with private placements. It is a dually registered investment adviser and broker-dealer, according to FINRA.
The above information, obtained from public sources, has been provided by Haselkorn & Thibaut, P.A., which is investigating potential securities claims involving Dalmore. If you have had transactions with the Dalmore Group and would like to understand your position, please speak to one of our securities attorneys. Haselkorn & Thibaut is a national securities arbitration, securities fraud, and investor protection law firm with offices in Florida, New York, Arizona, Texas, and North Carolina.