Signet Securities, LLC (CRD #154198, Columbus, Ohio)

October 3, 2024 – An AWC was issued in which the firm was censured, fined $100,000, and required to certify that it has remediated the issues identified in the AWC and implemented a reasonably designed supervisory system, including WSPs. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it willfully violated Reg BI by failing to maintain, and enforce written policies and procedures, and failed to maintain a supervisory system reasonably designed to achieve compliance with the firm’s obligation under Reg BI to conduct reasonable due diligence of private placement offerings so as to ensure it had a reasonable basis to believe the recommendation could be in the best interest of at least some retail investors. The findings stated that the firm recommended sales totaling $140 million to investors in Regulation D private placement offerings. Some of the sales were to accredited retail investors. At all times, the firm maintained written procedures requiring the firm, when engaging in Regulation D Disciplinary and Other FINRA Actions 5 December 2024 offerings, to conduct a reasonable investigation of the issuer and its management. Despite these requirements, the firm’s due diligence for some of the private placement offerings that the firm recommended and sold was not reasonable. All of the offerings were sold by affiliates of a commercial real estate investment company and the firm’s diligence review for these offerings was limited to documents provided by the company. The findings also stated that the firm failed to maintain and enforce a supervisory system reasonably designed to achieve compliance with FINRA rules governing outside business activities (OBAs). In January 2020, registered representatives who were also employed by an affiliate of a company became registered with the firm. The firm and its principals were aware that the representatives engaged in OBAs, including outside activities with the company, and that these activities could create a potential conflict of interest because the firm recommended and sold securities offered by the company to its customers. However, until September 2021, the firm did not require the representatives to provide written notice of the OBA. Therefore, the firm failed to reasonably supervise the OBAs of its registered representatives. Furthermore, when the firm required the representatives, including a fifth representative employed by the company, to provide written notice of the OBA, it did not adequately document that it reasonably considered the factors set forth in FINRA Rule 3270.01 during its review of these disclosures. Specifically, although the firm acknowledged that the outside activities might be viewed by customers or the public as part of the firm’s business and that they may involve giving advice or directing investments in securities, they did not consider whether conditions or limitations should be imposed on those outside activities in order to mitigate any potential conflict of interest or customer confusion. The findings also included that the firm willfully violated Section 17(a)(1) and Rule 17a-14 of the Exchange Act and FINRA Rule 2010 by failing to deliver a customer relationship summary (Form CRS) to its customers. The firm then began delivering Form CRS to new customers but failed to deliver Form CRS to any of the firm’s existing customers. (FINRA Case #2021069303201) If you have suffered losses as a result of Signet Securities's act and/or actions, we would like to hear from you. We are currently investigating claims on behalf of clients who have suffered significant losses in their portfolios that are managed by Signet Securities. The Schwartz Law Firm represents investors in claims against financial advisors and their firms. If you have questions about your potential claim or need assistance from an investment fraud lawyer, please contact us at 866-618-0545 or email Matthew Schwartz directly at mschwartz@tslfirm.com.