Brochu and Schlesinger sold Class B units pursuant to a private placement memorandum containing inaccurate financial projections. Brochu and Schlesinger worked on the private placement memorandum, and Brochu supervised registered representatives who worked on the memorandum’s financial projections. Brochu discovered inaccuracies in the financial projections contained in the memorandum and reported them to firm managers, but incorrectly determined that the inaccuracies were not material and did not disclose them to customers who had purchased the securities. Schlesinger accepted the determination that the inaccuracies were not material and should not be disclosed. Brochu and Schlesinger continued to use the inaccurate private placement memorandum to sell additional units. Acting through Brochu, a member firm failed to establish, maintain and enforce a reasonably designed supervisory system and written procedures regarding its registered representatives’ private securities transactions.
David Francis Brochu (Principal): Fined $20,000; Suspended 15 business days in all capacities
Jill Schlesinger (Principal): Censured; Fined $10,000