Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
Great Nation Investment Corporation

The Firm underwrote a “minimum-maximum” bond offering an entity conducted, according to the entity’s prospectus, the offering would raise a minimum of $99,000 and a maximum of $2,500,000. The findings prospectus stated that investor funds would be deposited in an interest-bearing escrow account with an escrow agent until the minimum offering amount was raised, and further stated that if the minimum offering amount was not raised during the offering period, all funds would be returned to investors. In connection with the offering, the Firm entered into an escrow agreement with a bank, which did business as the escrow agent, and among other provisions, the escrow agreement provided that the escrow agent should hold the escrow property in trust, commingled with similar funds of other issuers, in contravention of the requirements of SEC Rule 15c2-4. Upon receipt of funds from the offering, the escrow agent deposited the funds into an account at an unaffiliated third-party bank that was not a party to the escrow agreement, and investor funds from the offering were commingled with investment funds from several other unrelated offerings for which it served as escrow agent. FINRA 

The firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules, and the firm’s WSPs were deficient in that they did not have provisions regarding establishing and monitoring escrow accounts in connection with contingent securities offerings. In addition, in contravention of the terms of the prospectus, the firm accepted checks for the offering, totaling over $100,000, which were made payable to the firm instead of the escrow agent. Moreover, the firm was found to have willfully violated Section 15(c) of the Securities Exchange Act of 1934, SEC Rule 15c2-4 and NASD Rule 2110. (FINRA Case #)

Great Nation Investment Corporation : Censured; Fined $10,000
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