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John Krohn, Former Broker with Principal Securities, Accused of “Selling Away” Shares of Spotlight Innovation

John Krohn (CRD#: 2722975), a former registered representative with Principal Securities, Inc. (CRD#: 1137) in West Des Moines, Iowa, is alleged to have engaged in “selling away,” enticing clients to invest in Spotlight Innovation, Inc. without being authorized to do by his member firm. Spotlight Innovation was not a security sold by Principal Securities, Inc. Instead, it was a company in which John Krohn had a vested interest, and he allegedly used his position of influence at Principal Securities, Inc. to entice investors to purchase shares of Spotlight Innovation, allegedly resulting in significant losses for investors.

John Krohn

On February 25, 2019, customers alleged that John Krohn solicited large investments from them into companies controlled, managed, or owned at least in part by John Krohn, according to John Krohn’s BrokerCheck record accessed on January 15, 2020. The customers are seeking $28 million in damages. WHO-TV in Des Moines, Iowa also reports that dozens of Iowans may have been misled by John Krohn as part of his alleged conduct, in which he allegedly sold away from his member firm, Principal Securities.

The Financial Industry Regulatory Authority (FINRA) has also alleged that John Krohn sold away from his member firm. On May 29, 2018, John Krohn entered into an Acceptance, Waiver, and Consent (AWC) with FINRA in which he consented to the findings that he “engaged in outside business activities and made personal purchases totaling $7.9 million or private securities without notifying it about those activities or purchases.” John Krohn was suspended from the securities industry for three months, from June 4, 2018 to September 3,2018, and was fined $10,000. A copy of the AWC can be viewed here.

Whether you live in Iowa or elsewhere, if you’ve invested in Spotlight Innovation or Caretta Therapeutics, Inc., contact the securities attorneys of Fitapelli Kurta to learn about your options for recovery. Call (877) 238-4175 or email info@fkesq.com for your free case consultation.