California Firm and Principal Broker Fined Over Sale of Promissory Notes

Soreide Law Group, a Securities Arbitration Law Firm, (888) 760-6552, obtained the following information on FINRA’s website under “Disciplinary and Other FINRA Actions, July, 2013.”

GlobaLink Securities, Inc. (CRD® #29721, Pasadena, California) and Junhua Michael Liao (CRD #4278425, Registered Principal, San Gabriel, California)

the firm was fined $20,000, jointly and severally with Liao. Liao was also suspended from association with any FINRA member in any principal capacity for one month. Without admitting or denying the findings, the firm and Liao consented to the described sanctions and to the entry of findings that the firm, acting through Liao, executed an agreement to market and sell a Regulation D offering of promissory notes for a medical receivables financing company.

FINRA's findings stated that the firm sold $1,260,049 of the notes to some customers, and these sales generated approximately $56,700 in commissions for the firm. The findings also stated that as the firm’s chief compliance officer (CCO) and president throughout the relevant period, Liao was responsible for ensuring that the firm established, maintained, and enforced a supervisory system and written supervisory procedures (WSPs) reasonably designed to achieve compliance with applicable laws rules, and regulations.

The findings also included that the firm maintained WSPs pertaining to the sales of private placements, but the WSPs were inadequate in that they lacked specifics concerning how the firm would conduct due diligence, process private placement transactions, ensure that a Regulation D product was suitable for investors, and document the firm’s decisions and actions regarding private placement transactions. FINRA found that as a result of the firm’s deficient supervisory system and WSPs, the firm, acting through Liao, failed to conduct adequate due diligence on the offering. Such failure prevented the firm and Liao from learning that the issuer had experienced payment problems on earlier note offerings and thus, the private placement memorandum (PPM) misrepresented the issuer’s past performance.
The suspension was in effect from June 3, 2013, through July 2, 2013. (FINRA Case #2009018818901)

This ends the information obtained on FINRA's website.

If you have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding private placements, or other complex products, call for a free consultation on how to potentially recover your losses. To speak with an attorney call Soreide Law Group at 888-760-6552.