Erez Law is currently investigating former CP Capital Securities financial advisor Harold Connell (CRD# 1482623) regarding losses sustained through unregistered offerings. Connell was the CEO, president, principal supervisor and owner of CP Capital Securities in Miami, Florida from 2001 to April 2017. FINRA expelled the firm in July 2017.
In June 2018, FINRA barred Connell consented to the sanction and to the entry of findings that he participated in the sale of three unregistered Regulation D offerings through misrepresentations and omissions, raising more than $4.5 million from individual investors. According to FINRA, “None of the investors recouped any of their principal investments. The private placement memorandums (PPMs) for the three offerings provided that investors’ funds would be used to make investments in a variety of companies. However, the first offering was invested 85 percent in one penny stock company. The other two offerings were primarily undisclosed self-offerings. Investors’ funds were transferred to the firm’s holding company, and from there, to the firm. The third offering’s PPM did not disclose that the companies that received their funds, the firm and its holding company, were deeply in debt. The third offering’s PPM also did not disclose that investor funds would be used to pay non-firm expenses and money owed to prior offering investors.”
FINRA found that Connell sold the offerings without a reasonable basis to believe that they are suitable for any investor. No due diligence was performed on the first offering. The second and third offerings raised money for CP Capital Securities’ holding company and the firm, and not a diverse blanket of investments as represented in the offerings’ PPMs and were also not suitable.
FINRA also found that Connell failed to reasonably supervise two registered representatives and an associated person involved in the sales of these products and the management of the funds obtained from customers, and he was required to investigate red flags and act upon the results of such investigation.
Connell was also the subject of four additional regulatory investigations between 2006 and 2012, regarding engaging a person with a criminal record to perform administrative duties as a de-facto employee; compliance; failure to amend a U4 to disclose material information; and failure to supervise and failure to maintain books and records.
Connell has been the subject of one customer complaint, according to his CRD report:
October 2016. “The Plaintiff, Barth, LLC is demanding judgement against Harold Connell and others for compensatory and special damages, costs, interest, attorney fees and other relief deem appropriate by the court relating to perceived losses in investments made by plaintiff in 2013, 2014 and 2015.” The customer is seeking $1,458,000 in damages and the case is currently pending.
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, CP Capital Securities may be liable for investment or other losses suffered by Connell’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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