South Florida Arbitration & Litigation Lawyer Blog
Oil and Gas Limited Partnership Fraud, Misrepresentation and Negligent Supervision Lawyer, Russell L. Forkey, Esq.
November, 2011:
Lone Star Securities, Inc. (CRD #20452, Addison, Texas) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $35,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to provide the required financial statements for oil and gas private placement offerings to non-accredited investors who invested in the offerings, and negligently failed to disclose material information to customers who invested in some of the oil and gas private placement offerings. The findings stated that the firm failed to disclose certain state regulatory orders against the sole owner of some of the offerings, a portion of the expenses of one firm were paid by the issuer of an offering, and an arbitration award of $526,186 against the controlling shareholder of the general partner of another offering. The findings also stated that the firm conducted a securities business while failing to maintain its required minimum net capital, which resulted in inaccurate books and records and a net capital deficiency. The findings also included that the firm filed an SEC Rule 17a-11 notification reporting the net capital deficiency; the notifications to FINRA and the SEC were not timely. (FINRA Case #2009016271001).