California Broker Fined and Suspended by FINRA Over Sale of Unregistered Securities

Darren C. Goodrich (CRD #4213469, Manhattan Beach, California)

was fined $10,000 and suspended by FINRA for 30 days because on behalf of certain clients, Goodrich allegedly sold certain shares of an issuer whose securities were not registered and were not subject to an applicable exemption from registration.

FINRA's findings stated that Goodrich’s clients allegedly deposited and sold large blocks of the issuer. The clients completed deposited securities questionnaires, in which they indicated that they acquired the shares in private transactions from other members of the group. They did not give any explanation of their business activities, and Goodrich and his member firm did not adequately investigate the transactions to determine the basis for the repeated issuance of large blocks of stock.

Despite the presence of red flags, the firm approved the sale, concluding the clients were not acting in concert. That conclusion was not reviewed or revisited, even after six of the cleints sold about four million shares six days later, all in one day. Goodrich took and executed the sell orders in two groups. The first was completed within 90 seconds and, an hour later, the second was completed within one minute. Goodrich failed to undertake sufficient efforts to ascertain whether the stock could be properly sold, and accordingly did not satisfy his duty to conduct a reasonable inquiry, which is a crucial part of the brokers’ exemption.

The suspension was in effect from December 1, 2014, through December 30, 2014.
(FINRA Case #2010023220505)

Darren C. Goodrich has been registered in the securities industry for 13 years and is currently registered with the following securities firm:

BMA SECURITIES (CRD# 108219)
2321 ROSECRANS AVENUE, SUITE 3285, EL SEGUNDO, CA 90245 Registered with this firm since 10/2001

Darren C. Goodrich was previously registered with the following securities firm(s):

03/2001 - 01/2002 J. ALEXANDER SECURITIES, INC. (CRD# 7809) - LOS ANGELES, CA

This ends the information summarized from FINRA's January 2015 Disciplinary report.

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