West Palm Beach, Florida Securities Arbitration Lawyer, Russell L. Forkey, Esq.
In addition to providing information relative to the results of certain publically available enforcement awards, we have recently added a new feature to our site, which we are incorporating herein. We are now providing iFINRA generated nformation relative to FINRA complaints issued in the months reference below. Please keep in mind that the issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Because these complaints are unadjudicated, you may wish to contact the respondents before drawing any conclusions regarding the allegations in the complaint. However, if you feel that you have suffered damage as a result of this same activity, immediately call the law office of Russell L. Forkey for your free initial consultation.
Complaint Filed By FINRA in Janurary of 2011
Brendan Walter Coughlin (CRD #4917244, Registered Principal, Dallas, Texas) and Henry Deimel Harrison (CRD #4919907, Registered Principal, Dallas, Texas) were named as respondents in a FINRA complaint alleging that they were co-founders, managing partners and registered principals of a member firm that marketed and sold preferred stock interests in a series of private placements offered by the firm’s affiliated issuer, a nonregistered entity; and Coughlin and Harrison were also founders of the affiliated issuer. The complaint alleges that the offerings offered series of non-convertible redeemable cumulative preferred stock and each claimed an exemption from the registration pursuant to Rule 506 of Regulation D of the federal securities laws. The complaint also alleges that Coughlin and Harrison conducted each offering through a syndicate of participating retail broker-dealers and the offerings were sold nationwide to customers through these retail broker-dealers, raising approximately $485 million; the retail broker-dealers received fees and/or commissions for soliciting investors in these offerings. The complaint further alleges that Coughlin and Harrison employed wholesalers who assisted the retail broker/dealers with product training and in providing sales and marketing materials designed to encourage individual investors to purchase the offerings. In addition the complaint alleges that Coughlin and Harrison participated in the drafting, preparation, approval and/or dissemination of various materially false and misleading statements contained in the private placement memoranda the affiliated issuer issued. Moreover, the complaint alleges that Coughlin and Harrison failed to disclose the sources of funds used to pay distributions and dividends to investors, and affirmatively represented that the source of dividend payments was production revenue when that was not the case. Furthermore, the complaint alleges that, contrary to an attorney’s advice that prior disciplinary history had to be disclosed in the private placement memoranda for the offerings, Coughlin and Harrison failed to disclose prior disciplinary history of the affiliated issuer’s founder and owner, which was in connection with his offering of unregistered securities, and they failed to disclose the founder’s ownership and involvement in the management of the affiliated issuer. The complaint also alleges that the firm’s accounting department, acting on instructions from Coughlin and Harrison, transferred tens of millions of dollars of investors’ funds, to the founder of the firm’s affiliated issuer ostensibly to acquire oil and gas interests, with little, if any, documentation of the purpose of the transfers, the improper financial dealings with the founder, and the undocumented loans and transfers were not disclosed to investors. (FINRA Case #2009017497202)