Were you the victim of former Principal Securities, Inc. broker John Krohn (CRD# 2722975)? Krohn has been registered with Principal Securities, Inc. in West Des Moines, Iowa from 1996 to 2017. Krohn is accused of selling away, which is the sale of unapproved outside investments by the affiliated brokerage firm.
In June 2018, Krohn was sanctioned to a $10,000 civil and administrative penalty and was suspended for free months after he consented to the sanctions and to the entry of findings that he “engaged in outside business activities and made personal purchases totaling $7.9 million of private securities away from his member firm without notifying it about those activities or purchases. The findings stated that Krohn’s failure to give his firm prior written notice of the outside business activities prevented the firm from considering issues such as whether his outside business activities would interfere with his responsibilities to the firm or its customers, and whether customers or the public would incorrectly view the activities as part of the firm’s business. The findings also stated that Krohn’s private securities transactions were outside the scope of his employment with the firm and he did not notify his firm about his role in them nor whether he had received or expected to receive selling compensation. Krohn made some of those purchases through the investing company that he owned jointly with a customer.”
According to Krohn’s profile on LinkedIn, Krohn is currently the president and CEO of Spotlight Innovation Inc.
Krohn has been the subject of five customer complaints between 2007 and 2020, two of which were denied, according to his CRD report:
April 2020. “The claimants allege the firm failed to supervise John Krohn’s private securities transactions and dealings with claimants, is liable for Mr. Krohn’s misconduct and claimant’s losses.” The customer is seeking $10 million in damages.
February 2020. “The claimants allege the firm failed to supervise John Krohn’s private securities transactions; his selling away activities; and his outside business activities that resulted in damages to them.” The customer sought $1.2 million in damages.
February 2019. “The claimants assert that John Krohn solicited large investments from them into venture capital companies owned, managed, or controlled at least in part by Krohn.” The customer is seeking $28 million in damages and the case is currently pending. This complaint was regarding selling away.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Principal Securities, Inc. may be liable for investment or other losses suffered by Krohn’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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