Dawson James Securities of Boca Raton Fined and Censured by FINRA

Soreide Law Group represents clients nationwide before FINRA on a contingency fee basis.  We are conveniently based in Pompano Beach, Florida, for all of our South Florida clients.  The following information regarding a South Florida brokerage firm, was obtained from the April 2017 Disciplinary Report on FINRA’s website:
Dawson James Securities, Inc. (CRD #130645, Boca Raton, Florida)
was censured and fined $75,000 for alleged supervisory failures relating to research and private offerings and the supervisory failures led to rule violations in both areas.
FINRA’s findings stated that Dawson James Securities did not adopt or implement written supervisory procedures designed to ensure that research analysts did not participate in efforts to solicit investment banking business. The Written Supervisory Procedures (WSPs) did not specifically address how research analysts’ communications with issuers should be supervised or who research analysts should consult about any potential concerns regarding communications with issuers.
According to FINRA, Dawson James Securities did not maintain reasonable procedures governing interactions between the firm’s research staff and current or potential investment banking clients, nor did anyone at the firm supervise or review the communications that took place at those meetings.
The firm’s WSPs also were not reasonably designed to ensure compliance with the disclosure requirements of the research rules.
FINRA’s findings also stated that Dawson James Securities did not have a reasonable supervisory system because the firm’s director of research supervised his own activities as a research analyst. No person at the firm was formally assigned to supervise the director of research, including review of his research reports, nor was there systematic or regular review of his reports.
FINRA found that as a result of these supervisory failures, the firm’s Director of Research appeared in a video along with other firm executives that advertised the firm’s investment banking services. In the video, the Director of Research speaks about the merits of the firm’s investment banking services, contrary to FINRA rules that prohibit research analysts from participating in efforts to solicit investment banking business.
FINRA also found that Dawson James Securities failed to enforce its written procedures by failing to conduct a reasonable investigation into a best efforts part or none contingency offering. As a selected dealer participating in the offering, the firm did not adequately investigate the use of non-bona fide sales in the minimum contingency calculation. Because the minimum contingency requirement was not met with bona-fide sales, the issuer was required to return all investor funds. The firm’s failure to conduct adequate due diligence and to request the required letter from the issuer or managing broker-dealer thereby contributed to the improper closing of the offering and placed investor funds at risk.
Also FINRA determined that the firm participated in an offering in which the issuer designated its law firm’s interest on a lawyer’s account as the escrow account for the receipt of subscription funds. The firm received $62,500 in subscription checks from investors and improperly transferred those checks to the designated escrow account.
(FINRA Case #2015044393901)
If you've experienced investment losses due to the actions or recommendations of Dawson James Securities in Boca Raton, Florida, contact the Florida-based Soreide Law Group for a no-cost consultation regarding the possible recovery of your financial losses at:  888-760-6552.