FINRA Hearing Panel Fines Carolina Financial Securities, LLC For Promissory Note Sales

FINRA fined Carolina Financial Securities, LLC (“CFS”) of Brevard, North Carolina $60,000 and served it with a Letter of Caution in a case involving allegations that CFS made material misrepresentations and omissions in connection with the sale of securities. FINRA also found that that the firm recommended securities- certain senior secured notes- to customers without conducting an investigation that was sufficient to provide a reasonable basis for determining that the notes were suitable for any investor. Further, FINRA found that CFS made false and misleading communications to the public by distributing offering materials that contained false statements. Finally, FINRA found that CFS failed to enforce the firm’s own Written Supervisory Procedures (WSPs) by in connection with permitting brokers employed by CFS to sell the subject secured notes.

Many retail investors may buy into non-conventional investments such as the subject notes without first being fully informed of the risks. As members and associated persons of FINRA, brokerage firms and their financial advisors must ensure that adequate due diligence is performed on any investment that is recommended to investors. Further, firms and their brokers must ensure that investors are informed of the risks associated with an investment, and must conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and risk profile. Either an unsuitable recommedation to purchase an investment or a misrepresentation concerning the nature and characteristics of the investment may give rise to a claim against a stockbroker or financial advisor.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in non-conventional investments, including promissory notes. Depending on the facts and circumstances, investors may be able to recover their losses in FINRA arbitration or litigation. Investors may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.