Growth Capital Services, Inc., a brokerage firm headquartered in San Francisco, California, has been censured and fined $35,000.00 by Financial Industry Regulatory Authority (FINRA) based upon consenting to findings that, inter alia, Growth Capital Services failed to supervise private securities transactions effected by five of the firm’s stockbrokers. Letter of Acceptance, Waiver and Consent, No. 2013034981501 (Sept. 29, 2017).
According to the AWC, from October of 2008 to April of 2013, the firm did not create or maintain reasonable supervision systems regarding private securities transactions, and neglected to properly enforce supervisory procedures to ensure that private securities transactions complied with National Association of Securities Dealers (NASD) Rule 3040.
The AWC stated that the firm did not comprehend that its registered representatives made disclosures of private securities transactions; the firm treated registered representatives’ transactions as outside business activities as a result. The AWC stated that from October of 2008 to April of 2011, the firm knew that registered representatives engaged in outside business activities involving the investment of customer’s funds away from the firm’s auspices. Yet, the firm evidently failed to conduct any review of the transactions, and did not document those transactions conducted by at least four of the firm’s registered representatives.
FINRA found that the firm was cognizant about its registered representatives having sold away from the firm. Apparently, representatives facilitated private securities transactions in August of 2012 and April of 2013 that were never investigated, nor subject of any supervisory review by the firm. By failing to adequately supervise the firm’s registered representatives in that regard, FINRA found that the firm’s conduct was violative of FINRA Rules 2010 and NASD Rule 3010(a) and 3010(b).
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
