Brent David Hurt, of Chicago, Illinois, the Chief Compliance Officer of Redridge Securities, Inc., has been fined $10,000.00 and suspended for thirteen months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he inadequately supervised a stockbroker’s private securities offerings. Letter of Acceptance, Waiver and Consent, No. 2015044172201 (May 31, 2017).
According to the AWC, between May of 2010 and September of 2014, Hurt was chief compliance officer and chief executive officer of Red Ridge Securities, Inc., an entity formerly known as H.D. Brent & Company, Inc. During this period, Hurt was responsible for supervising the firm’s registered representative, EJ, who effected customers’ investment transactions in three private placement offerings pertaining to Great Exuma Project – a real estate venture that Hurt was manger and limited partner of. Particularly, Hurt was tasked with reviewing the solicitation efforts of EJ in reference to customers’ purchases of the offerings, which consisted of two private placement debt related offerings in 2010 and 2012 as well as an equity offering in 2013.
Apparently, EJ’s conduct was not adequately supervised by Hurt. Specifically, Hurt’s name had been input by EJ in the firm’s subscription documents. EJ also reportedly utilized inaccurate execution dates, and failed to provide the firm with customers’ subscription agreements. The AWC stated that the firm’s supervisory failures consisted of the lack of review of documentation EJ utilized in the offerings as well the lack of review of EJ’s solicitation activities. These supervisory failures reportedly caused the firm to maintain records and books which were not complete or accurate. FINRA found that Hurt’s conduct in this regard was violative of NASD Rules 2010 and 3010.
The AWC stated that Hurt also failed to keep accurate or complete records on how the proceeds of investors would be utilized even though Hurt had been responsible for determining how investors’ funds would be utilized for the private placement offerings to ensure conformity with the representations made in the offerings. Hurt evidently failed to document expenses or other reimbursements of funds in connection with the three private placements; causing the firm to violate Securities and Exchange Act of 1934 Section 17 as well as Rules 17a-4(b) and 17a-3(a)(6). Consequently, FINRA found Hurt’s conduct to be violative of FINRA Rules 2010 and 4511, as well as NASD Rule 3110(a).
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Hurt has been identified in three customer initiated investment related disputes containing allegations of his misconduct while employed with Chatfield Dean & Co., Program Trading Corp., and Red Ridge Securities, Inc. Specifically, a customer was awarded $17,600.00 in damages according to an investment related arbitration claim involving Hurt’s misconduct, based upon allegations against Hurt of unsuitability, misrepresentation, unauthorized trading and mismanagement of the customer’s over-the-counter equity portfolio.
On February 23, 2005, a customer filed an investment related written complaint involving Hurt’s conduct, in which the customer requested $12,000.00 in damages based upon allegations that Hurt made faulty guarantees concerning the customer’s investment and traded the customer’s margin account in an unauthorized manner. Further, on November 9, 2016, a customer filed an investment related arbitration claim involving Hurt’s conduct, in which the customer requested $198,840.00 in damages based upon allegations that Hurt breached his fiduciary duties to the customer.
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