Justine Zhou (also known as Jun Zhou) of Littleton Colorado a stockbroker formerly registered with The Leaders Group Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that Zhou engaged in private securities transactions which included the sale of private real estate fund membership interests and promissory notes during the time that she was associated with Leaders Group Inc. Letter of Acceptance Waiver and Consent No. 2018059391501 (Nov. 11, 2019).
According to the AWC, from April of 2017 to June of 2018, the sale of $9,050,000.00 in private real estate fund membership interests and a $5,000,000.00 promissory note had been facilitated by Zhou in part through her ownership and control of a real estate company. Those securities had been sold through a series of fifteen transactions which involved seven investors including a company established by Zhou’s customers at Leaders Group. The AWC indicated that a third party money manager who was responsible for managing the private real estate funds and who was party to the promissory note had paid Zhou’s company $179,000.00 in return for her efforts.
In addition, the AWC stated that a different private real estate fund, Zhou Fund I LLC, had been created by Zhou; and the real estate company that Zhou owned and controlled was designated as its private real estate fund manager. Securities and Exchange Commission subsequently received filings from Zhou in reference to an exempt securities offering in June through July of 2018 which concerned $2,000,000.00 in membership interests being sold by the stockbroker’s company through twelve transactions. The AWC stated that $20,000.00 had been paid to the real estate company Zhou controlled in return for her sourcing of the transactions. In addition, Zhou’s real estate company took in asset management fees commencing in March of 2019.
The AWC stated that twenty-seven total private securities transactions, totaling $16,050,000.00 in sales, had been facilitated by Zhou between April of 2017 and August of 2018 without any mention of it by her to The Leaders Group. There was no point where the firm provided any authorization for Zhou to take part in any of the securities transactions outside of its auspices. FINRA found that Zhou’s conduct was violative of FINRA Rules 2010 and 3280.
Zhou was discharged by The Leaders Group on August 2, 2018 founded on accusations of her failing to disclose an outside business activity and selling away from the securities broker dealer.
