DH Hill Securities LLLP a securities broker dealer headquartered in Kingwood Texas has been censured and fined by Financial Industry Regulatory Authority (FINRA) supported by findings that the securities broker dealer made unregistered securities transactions. Letter of Acceptance Waiver and Consent No. 2019063187001 (July 22, 2021).
According to the AWC, from August of 2015 to December of 2019, interests in private placement offerings had been sold by DH Hill Securities. The securities broker dealer claimed that these transactions were exempt from federal securities registration requirements.
The regulator pointed out that sixteen investors had been targeted by DH Hill Securities. Because of these solicitations the investors purchased $1,000,000.00 worth of interests in the private placement offerings. For those transactions to be exempt from securities registration requirements, the investors needed to have some form of existing relationship with DH Hill Securities as the interests in private placements could not be generally solicited or advertised.
DH Hill Securities took steps to participate in the offering before dealing with its customers. The securities broker dealer did due diligence on the offerings, spoke with investors regarding the private placements, sold interests in the private placements, and executed agreements to be placement agent.
As an example, in 2017, DH Hill participated in a private offering. A placement agent agreement was executed by the firm and the issuer concerning that offering. Interests were sold to investors beginning on April 10, 2018. One of the investors bought the issuer’s securities on May 28, 2019. The securities broker dealer maintained no relationship with that investor before the firm took part in the offerings.
FINRA determined that DH Hill effected the unregistered distribution of securities to sixteen investors in violation of FINRA Rule 2010.
