Signet Securities LLC, a Columbus, Ohio-based securities broker dealer, has been sanctioned by Financial Industry Regulatory Authority (FINRA) for failure to supervise. The securities broker dealer, a subsidiary of Signet Capital, primarily sells private placement securities to retail investors and has been a FINRA member since January 2011. Letter of Acceptance, Waiver, and Consent (AWC) No. 2021069303201
FINRA’s findings, outlined in a Letter of Acceptance, Waiver, and Consent (AWC) issued on October 3, 2024, detail multiple violations. According to the AWC, Signet Securities failed to conduct proper due diligence on 13 private placement offerings from affiliates of a commercial real estate investment company, referred to as Company A. The securities broker dealer relied solely on documents provided by Company A without independent verification. This violated Regulation Best Interest (Reg BI) under the Securities Exchange Act of 1934 and FINRA Rules 3110 and 2010.
From January 2020 to September 2021, Signet Securities also failed to supervise outside business activities (OBAs) involving five registered representatives associated with Company A. Initially, the securities broker dealer did not require written notices for OBAs. Even after obtaining these notices, Signet Securities failed to document whether any restrictions were needed to mitigate conflicts of interest, violating FINRA Rules 3110, 3270.01, and 2010.
In addition, between June 30, 2020, and April 14, 2022, the securities broker dealer did not deliver Form CRS, a required customer relationship summary, to any of its 282 customers. After April 14, 2022, Signet Securities delivered the form only to new customers, failing to provide it to existing customers. This violated Section 17(a)(1) of the Exchange Act, Rule 17a-14, and FINRA Rule 2010.
On October 3, 2024, FINRA imposed a censure and a $100,000 fine. Signet Securities consented to the findings without admitting or denying the allegations.
