FINRA heavily sanctioned 3 Registered Reps for their participation in private sales of promissory notes.  Fortunately, New England Securities came through to "save the day."

Irving Louis Adler, while serving as a Registered Rep with New England Securities, was charged by FINRA with participating in private securities transactions - selling promissory notes issued by an individual to customers of his accounting firm and to customers of his member firm.  Adler allegedly failed to provide written notice to his firm - as to the proposed transactions, his proposed role, and what, if any, selling compensation he would receive.  Adler introduced his clients to the issuer and they invested $2.5 million in promissory notes.  For his referrals, Adler was paid $16,434.  Ultimately, however, Adler's customers and other investors lost over $2.1 million on the transactions.  New England Securities made full restitution to Adler’s clients even though some were not customers of the firm.   Adler was barred from the industry.  This is FINRA Case #2010021436801.  

Scott Jeffrey Adler, as a Registered Rep with New England Securities, was charged by FINRA with participating in the same private securities transactions as Irving Louis Adler.  He too failed to notify his member firm.  His clients invested about $700,000 in the individual’s promissory.  Ultimately, the customers lost about $630,000, and the firm made full restitution to Adler’s clients, including one who was not a customer of the firm.  Adler was fined $36,434, which includes disgorgement of $16,434, and suspended 12 months.   This is FINRA Case #2010021436901.  

Carl Henry Blanchard, as a Registered Rep with New England Securities, was charged by FINRA with participating in the same private securities transactions as Irving Louis Adler and Scott Jeffrey Adler.  He too failed to notify his member firm.  A single client invested about $325,000 in the individual’s, and that customer ultimately lost $290,000.  The firm made full restitution to Blanchard’s client even though he was not a customer of the firm.  Blanchard was fined $31,434, which includes disgorgement of $16,434, and suspended 6 months.  This is FINRA Case #2010021436501.  

For further details, go to:   [Disciplinary Actions for May 2011]