John Michael Krohn (also known as John Micheal Krohn) of West Des Moines Iowa a stockbroker formerly registered with Principal Securities Inc. is referenced in a customer initiated investment related arbitration claim where the customer sought $28,000,000.00 in damages based upon accusations that large investments in companies that Krohn owned or controlled had been solicited from the customer by Krohn during the period in which he was associated with Principal Securities Inc. and these transactions were effected by Krohn away from the securities broker dealer. Financial Industry Regulatory Authority (FINRA) Arbitration No. 19-00520 (Feb. 18, 2019).
FINRA Public Disclosure reveals that Krohn is referenced in two more customer initiated investment related disputes containing allegations of his violative conduct when he was employed by Principal Securities Inc. In particular, a customer filed an investment related complaint regarding Krohn’s conduct in which the customer requested more than $5,000.00 in damages founded on accusations that the customer had been placed into annuity products that were wholly unsuitable and not within the customer’s best interests. On September 7, 2017, another customer filed an investment related complaint involving Krohn’s activities where the customer sought $97,000.00 in damages supported by allegations that the customer had been steered by Krohn towards purchasing shares offered through a private placement which Principal Securities Inc. failed to offer or authorize Krohn’s involvement in.
FINRA Public Disclosure additionally confirms that Krohn has been fined $10,000.00 and suspended from associating with any FINRA member in any capacity based upon consenting to findings that Krohn engaged in undisclosed outside business activities and selling away or private securities transactions in which the stockbroker effected more than $7,900,000.00 in purchases in securities without having notified Principal Securities or procured the securities broker dealer’s consent. Letter of Acceptance Waiver and Consent No. 2017052852801 (May 29, 2018).
According to the AWC, from April of 2014 to January of 2017, Krohn directed four companies, one of which he owned with a customer of Principal Securities. Krohn was required to disclose his involvement in these companies since they were outside the scope of his duties at the securities broker dealer. There was no point in which Krohn notified Principal Securities which prevented the securities broker dealer from determining the possible detriment that his involvement in those outside companies might have on customers of the firm. FINRA found Krohn’s conduct violative of FINRA Rules 3270.
FINRA also stated that from December of 2012 to December of 2016, $7,900,000.00 worth of investments in ten companies’ securities had been purchased by Krohn. Some of those transactions were executed by Krohn through his company that he owned along with the other Principal Securities customer. There was no point in which Krohn detailed his role in these private securities transactions which included any compensation received by the stockbroker for facilitating the private securities transactions. Krohn’s conduct was violative of FINRA Rules 3280 and 2010 as well as NASD Rule 3040.
Krohn’s registration with Principal Securities Inc. has been terminated as of January 12, 2017.
