The President/CCO of a broker-dealer was named in a FINRA complaint alleging wide-spread violations in communications with the public - including research, advertising, sales lit, and correspondence - among other things.  The individual no longer is associated with MN-based Sumner Harrington Ltd., after 10 years with the firm. 

    Newsletter/Research.   The Principal approved and caused his member firm to circulate a newsletter relating to a company whose securities his firm marketed, generally indicating that the company’s performance had improved.  But the newsletter failed to disclose material facts and information concerning the company’s financial difficulties, which were necessary to give a balanced picture for investors.  Risk disclosures about recent events at the company were insufficient, as well.  The Principal further disseminated misleading letters that contained untrue statements of material fact and omitted to state necessary material facts to customers and omitted all reference to the financial difficulties the company was experiencing, including but not limited to an inability to meet obligations as they became due.

    Internet Advertising.  The Principal caused his firm to advertise renewable notes on the Internet, using Internet ads and maintaining websites for its issuers’ note offerings when these advertisements omitted material information, were not fair and balanced, and failed to provide a sound basis for evaluating the facts with regard to the notes.

    Sales Literature.   The Principal allegedly created, approved and caused the distribution of sales kits, print advertisements, mailers, form letters and newsletters that emphasized positive statements about issuers and the high returns offered by notes that omitted material information, were not fair and balanced, failed to provide a sound basis for evaluating the facts and made exaggerated, unwarranted or misleading statements. 

    Advertisements, Communications with Public.   The Principal allegedly failed to have the firm’s public communications, including advertisements, approved by signature or initial by a firm registered principal and failed to maintain records of public communications.  Moreover, as the individual who created, approved and maintained records of these advertisements, the Principal was responsible for their accuracy. 

    Form BD Filings, New Capital.   Forms BD filings made by or for the Principal, on the firm’s behalf, allegedly were false or inaccurate, in that they listed a different individual as the firm CCO, when in fact the Principal held that title or responsibilities of CCO.  This caused the firm’s books and records to be inaccurate.  Finally, the Principal allegedly failed to prepare accurate net capital calculations, which caused the firm to maintain inadequate net capital while it conducted a securities business.  (FINRA Case #2008013429301)   [November Disciplinary Actions]