Palm Beach Gardens, FL, Broker and Firm Named in FINRA Complaint

The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, February, 2013.”

Delaney Equity Group, LLC (CRD #142285, Palm Beach Gardens, Florida) and David Cameron Delaney (CRD #2447186, Registered Principal, West Palm Beach, Florida)

were named respondents in a FINRA complaint alleging that the firm, acting through Delaney, its
president/CCO/AMLCO, failed to conduct adequate due diligence to determine whether they were participating in a scheme to evade the registration requirements of Section 5 of the Securities Act of 1933 by selling shares of low-priced equity securities that were unregistered and non-exempt.

The FINRA complaint alleges that a firm customer had obtained almost $2.4 million through the sale of these securities, which ceased only when the firm’s clearing firm restricted the customer’s accounts. The complaint alleges that the firm, acting through Delaney, relied on opinion letters by one counsel representing all of the issuers, who was later found to have issued inaccurate correspondence to the OTC markets and failed to note the contradiction in the customer’s actions and representations.

Delaney Equity Group, acting through Delaney, sold almost a billion shares of common stock on the customer’s behalf that were not registered with the SEC, and no exemption from registration applied to such sales.

FINRA's complaint also alleges that the firm, acting through Delaney, failed to establish, maintain and enforce adequate policies and procedures, including WSPs, reasonably designed to ensure compliance with Section 5 of the Securities Act to prevent the sale of unregistered securities not exempt from registration. The firm, acting through Delaney, failed to develop and implement AML policies, procedures and internal controls reasonably designed to achieve compliance with the BSA and implementing regulations. The complaint further
alleges that the AML procedures failed to address the detection, monitoring, analyzing, investigating and reporting of suspicious activity in the context of its securities liquidation business. The firm, acting through Delaney, failed to enforce its WSPs and impose heightened supervision on the representative.

(FINRA Case #2010021108301)
This ends the information from FINRA's website.

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