According to BrokerCheck records Ross Sinclaire & Associates, LLC (Ross Sinclaire) has been subject to a regulatory action over, among other things, the firm’s sales practices with respect to several private placement offerings. According to records kept by The Financial Industry Regulatory Authority (FINRA) Ross Sinclaire has been accused by FINRA of failing to disclose material information to investors in relation to several offerings offerings.
FINRA alleged that in March and April 2014, Ross Sinclaire was the exclusive placement agent for a private placement of notes and was involved in the preparation and circulation of a Confidential Information Memorandum (CIM) to seven accredited investors for notes. The proceeds were to provide to a film production company for the advance funding of anticipated state tax credits. The CIM disclosed that in addition to a 2% commission, Ross Sinclaire would also earn a “certain percentage” of profits on the sale of tax credits but failed to disclose that it would earn half of those profits. FINRA found that this information was a material fact that would have been important to investors. FINRA also found that the CIM also failed to disclose that one of Ross Sinclaire’s registered representatives was Vice President or the issuer.
In another offering, FINRA alleged that between December 2015 and December 2016, Ross Sinclaire omitted material facts from the Private Placement Memorandum (PPM) for municipal bonds underwritten by the Firm to finance the construction of a community recreation center. FINRA found that Ross Sinclaire failed to disclose in the PPM: (i) that the issuer had threatened to default on an earlier series of bonds and bond anticipation notes (BANs); (ii) that a loan agreement existed between the issuer and Ross Sinclaire: and (iii) information about the finances of both the issuer and Ross Sinclaire. FINRA determined that this information should have been included in the PPM as it would have been material to investors in deciding whether to invest in the bonds.