BROWSE BY TOPIC
Stories of Interest
- Bill Cosby Found Guilty of Sexual Assault
- Credit Suisse Fully Compliant on Sanctions: CEO
- Ex-UBS Metals Trader Beats Spoofing Conspiracy Charge
- Investment Advisor, WCAS Management Corp, To Pay Nearly $800K Over Conflicts of Interest
- Altaba, fka Yahoo!, to Pay $35Mn for Failing to Disclose Massive Cybersecurity Breach - SEC
- SEC Formerly Bars Martin Shkreli from Industry
- HF Billionaire Steve Cohen Buying Into Fintech Start-Ups
- Deutsche Bank Is Weighing Massive Cuts in Its U.S. Cash Equities Unit
- Richard Jenrette, Co-Founder of DLJ Investment Bank, Dies at 89
- Goldman Sachs Makes First Hire in Cryptocurrency Markets Unit
- Special FINRA Election to Fill Large Firm Governor Vacancy
- Chicago-Based Investment Adviser Sentenced to 151 Months in Prison - SEC
- Dun & Bradstreet Hit With FCPA Violations - SEC
- SEC Charges Additional Defendant in Fraudulent ICO Scheme
- Warren Buffett Simply Blew it on Wells Fargo Stock: Dick Bove (Video)
- Barclays and Deutsche Bank to Lag U.S. Trading Peers
- NY AG Schneiderman Seeks to Close Loophole That Could Let Trump Pardons Block State Charges
- 'Fearless Girl' is Moving to NYSE After Year Staring Down 'Charging Bull'
- What's In Your Wallet - American Express Shares Soar After Earnings Release
- Deutsche Bank's Executive Departures Continue Following Change in CEO
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
CEO/CCO Suspended 13 Months for Failing to Supervise Private Offerings
by Howard Haykin
Brent Hurt agreed to pay a $10K fine and serve a 13-month suspension to settle FINRA charges that he failed to supervise a registered rep of his member firm in connection with the sale of private offerings of securities related to a real estate development project.
BACKGROUND. Hurt, a resident of Chicago, IL, has been in the securities industry for 25 years with 7 firms. He holds the following licenses: Series 7, Series 27 (FinOp), Series 4 (ROP), Series 24 (GSP). From May 2010 through September 2014 (the relevant period), Hurt was CEO and CCO of Red Ridge Securities – f/k/a H.D. Brent & Company.
Hurt was the subject of disciplinary action taken by FINRA in 2015 in connection with failing to maintain adequate supervisory systems to monitor 3rd-party wire transfers. [NOTE: This sanction is also related to the "Bad Broker."] For that he was fined $17.5K and suspended from servings as a principal for 6 months. He was further disciplinedi n 2004 for violating SEC Rule 10b-9 (Prohibited representations in connection with certain offerings).
FINRA FINDINGS. Beginning in May 2010, Hurt and the Firm participated in 3 separate private offerings of securities related to a real estate development project on the Bahamian island of Great Exuma. Hurt had been a limited partner in that project since 1999 and currently is manager of the Great Exuma project.
In order to fund the Great Exuma project, Hurt and his Firm, solicited 3 private placements of securities: (i) May 2010 debt offering; (ii) October 2012 refinancing of the 2010 debt; and, (iii) May 2013 equity offering. The documents for each offering identified Hurt as the manager of the project and granted him broad discretion over the use of the funds in the construction project. Investors were required to execute a Subscription Agreement. The Offerings were sold by Hurt and a Registered Rep of the Firm, Eric Johnson ("EJ").
As the Firm's CEO and CCO, and EJ's direct supervisor at the Firm, Hurt was responsible for ensuring that the Firm established, maintained, and enforced a reasonable supervisory system – and during each of the offerings, Hurt was the only person responsible for supervising EJ’s solicitation of investors to purchase the Offerings.
However, Hurt’s supervision did not include a review of EJ's activities related to the Offerings, or a review of investor documents to ensure that they were accurate and complete. As a result, Hurt failed to detect or identify inaccuracies in the documents, including the following:
- EJ signed Hurt's name to subscription documents.
- EJ pre-populated a universal execution date of 12/31/12 on 18 subscription documents, regardless of when the investors executed those documents.
- EJ failed to return complete copies of investors' subscription agreements to the Firm.
This, in turn, caused the firm to maintain inaccurate books and records. The firm’s records were further impacted by Hurt’s failure to maintain complete or adequate records reflecting expenses, reimbursements, or how investor proceeds were used and related to investments in and expenditures related to the real estate development project.
This case was reported in FINRA Disciplinary Actions for July 2017.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015044172201.