Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2011
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.
Irving Louis Adler
AWC/2010021436801

Adler participated in private securities transactions when customers of his accounting firm and customers of his member firm purchased promissory notes an individual issued. Adler failed to provide written notice to his firm describing in detail the proposed transactions with the individual issuing the promissory notes, his proposed role therein, and stating whether he had received or might receive selling compensation in connection with the transactions.

Adler introduced his clients to the individual and they invested a total of approximately $2.5 million in the individualís promissory notes as a result of Adlerís referrals. The individual paid Adler approximately $16,434 in selling compensation for his referral. The customers and the investors lost a total of approximately $2,103,375 and the firm made full restitution to Adlerís clients even though some were not customers of the firm.

Irving Louis Adler : Barred
Bill Singer's Comment

Note that the Firm made full restitution of the $2.1 million in losses to the victims "even though some were not customers of the firm." If nothing else, that should underscore how these private securities transactions can impose (or potentially impose) liability upon the member firm. All of which should explain why firms are entitled to comprehensive, prior written notice about such away activity.

See, Scott Jeffrey Adler and Carl Henry Blanchard as apparent companion pieces of this story

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