McDonald Partners: 3 Regulatory Complaints
Public records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on June 13, 2019 indicate that Ohio-based brokerage firm McDonald Partners has received regulatory sanctions in connection to alleged rule violations. Fitapelli Kurta is interested in hearing from investors who have complaints regarding McDonald Partners (CRD# 135414).
Established in Ohio in 2005, McDonald Partners is headquartered in Cleveland, Ohio and registered with 50 US states and territories. According to the firm’s BrokerCheck report, McDonald Partners is the subject of three regulatory sanctions.
In 2019 FINRA sanctioned the firm in connection to allegations it did not report certain municipal securities transactions as required. According to FINRA’s findings, the firm reported neither the purchases into its riskless principal account nor the sales to its investment advisory clients “of certain riskless principal transactions.” FINRA’s findings stated additionally that the the firm transacted securities business without maintaining its required minimum net capital, specifically “by overstating the allowable portion of receivable commissions” from sales of two unregistered securities offerings, and also by failing to document “a haircut deduction in a money market mutual fund.” In connection with these findings, the firm was censured and issued a fine of $22,500.
In 2018 FINRA sanctioned the firm in connection to allegations it willfully violated securities law by acting as a “placement agent for an offering and releas[ing] investors’ funds after having used an interim loan to satisfy” part of the contingency amount. According to FINRA’s findings, the firm had agreed to satisfy a minimum contingency requirement before the offering closed by accepting funds from an external entity—specifically, an entity owned by the father of a firm representative, “who was participating in the sales of the offering, was an officer of the entity,” and who additionally had invested funds in the offering. FINRA states that the entity made the investment “pursuant to a convertible bridge note,” and that the repayment agreement connected with the note differed from repayment terms offered to previous investors, whose information stated that “any return on their investment was generally dependent” on the real estate investment’s success. FINRA’s findings go on to state that the firm determined that its minimum contingency had been met after it received $3.3 million from the representative’s father’s entity via the convertible note, consequently allowing funds to be disbursed to the issuer from the escrow account. However, according to FINRA, the issuer’s private placement memorandum “did not disclose the meeting of the minimum contingency” vis-a-vis the convertible bridge note, and consequently the sale of the issuer offering through the note “was a non-bona fide sale… and investors funds should not have been released.” In connection with these findings, the firm was censured and issued a fine of $50,000.
In 2016 the State of Arkansas sanctioned the firm in connection to allegations a representative sold securities from Arkansas to investors in other states without prior registration. The firm was issued a fine of $15,000.
If you or someone you know has a complaint regarding McDonald Partners, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be able to recover lost funds. Fitapelli Kurta accepts all cases on contingency: we only get paid if and when you collect money. You may have a limited window to file your complaint, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.