Jeffrey Rachlin Fined and Sanctioned by FINRA

 

has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $10,000, suspended from association with any FINRA member in any capacity for 30 business days, and suspended from association with any FINRA member in any principal capacity for 18 months. The fine must be paid either immediately upon Rachlin’s reassociation with a FINRA member firm following his all-capacity suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.

 

FIRNA reports that without admitting or denying the findings, Rachlin consented to the described sanctions and to the entry of findings that his member firm, acting through Rachlin and another firm principal, negligently omitted material facts in connection with its sales of promissory notes to investors.

 

These findings stated that the notes were issued by an entity which was controlled by a real estate developer. The firm, acting through Rachlin and another firm principal, negligently failed to disclose to investors that the entity had been experiencing cash flow problems and that the entity and other companies affiliated with the real estate developer had failed to make required interest payments to investors. The findings also stated that the firm, acting through Rachlin and another firm principal, negligently failed to disclose that it was unlikely that the entity’s affiliated company would be able to make its scheduled principal payments totaling $10 million that were due to its note holders.

 

 These findings also included that Rachlin helped prepare a document called “Investor Letter” for a company; the letter was later distributed by his firm. The Investor Letter constituted a research report, but it failed to disclose a firm representative’s ownership interest in the company and his receipt of compensation from the company.

 

Also, FINRA found that Rachlin helped prepare presentations regarding the company, which the firm’s registered representatives used to solicit potential investors at seminars. The presentations contained statements and projections that were without basis and were false, exaggerated, unwarranted and/or misleading, and failed to provide a balanced presentation by omitting material information regarding the significant risks associated with an investment in the company.

 

This suspension in any capacity is in effect from November 7, 2011, through December 19, 2011. The suspension in any principal capacity is in effect from November 7, 2011, through May 6, 2013. (FINRA Case #2010021058403)