Securities Lawyers Blog
The investment lawyers at Gana Weinstein LLP have experience helping investors determine whether their portfolio losses at investment firms, such as Boustead Securities, LLC, were caused by broker misconduct. There are many different ways that your broker can impermissibly drain your accounts. Our attorneys can help you understand the cause of your investment losses, uncover misconduct, and apply the law to hold accountable those responsible.
Boustead Securities is an investment banking firm that advises emerging growth and middle-market companies on initial public offerings, private capital raises, mergers and acquisitions, and restructurings across sectors such as healthcare, technology, energy, real estate, and consumer goods. Founded in 2006 as Monarch Bay Securities in Southern California, the firm rebranded in 2016 after joining forces with Boustead & Co of London, whose roots trace to a merchant trading house founded in 1828.
Boustead Securities, LLC – By the Numbers:
- CRD #: 141391
- Regulatory Events: 2
- Broker Employees: 32
Boustead Securities, LLC – In the News:
FINRA v. Boustead Securities, LLC (Case #2022075185901) – From January 2021 through December 2023 (the Relevant Period), Respondents Boustead Securities, LLC (Boustead) and Sutter Securities Incorporated (Sutter) violated anti-money laundering (AML), supervisory, recordkeeping, and other SEC or FINRA rules in connection with their jointly conducted investment banking businesses. Within the Relevant Period, the firms, which were commonly owned and controlled, acted as an underwriter or selling group member in approximately 30 public distributions of securities, including initial public offerings (IPOs) involving small, micro, and nano-capitalization issuers based in China or other foreign jurisdictions. The issuers in these offerings referred individuals to Boustead and Sutter to open brokerage accounts for the purpose of trading in the issuers’ securities. The referred individuals (issuer-referred customers) were often foreign nationals residing outside of the United States who never met or spoke in person with the firms’ representatives. The firms’ business model of underwriting public offerings for issuers located in China or other foreign jurisdictions and facilitating trading in those issuers’ low-priced securities for foreign issuer-referred customers posed risks to the firms including, among other things, that the brokerage accounts may be controlled by undisclosed persons or groups (i.e., nominee accounts) and that the trading in those accounts may be potentially manipulative or fraudulent. Neither firm, however, established or implemented a reasonably designed AML program tailored to the firms’ business activities and risks. Boustead and Sutter also failed to monitor for, detect, and investigate red flags that the accounts may be beneficially owned or controlled by nominees, both during the account opening process and after the firms opened the accounts. These red flags included nearly identical customer account profiles, customers with uncorroborated financial information, and investment amounts that were not commensurate with the customers’ reported occupations, incomes, or financial resources. Because the firms failed to monitor for, detect, or investigate these red flags, they failed to consider whether to file suspicious activity reports (SARs). Additionally, Boustead and Sutter failed to establish or implement AML policies and procedures, or conduct ongoing due diligence, to monitor for, detect, or investigate suspicious activity indicative of potentially manipulative or fraudulent trading. Because the firms failed to monitor for, detect, or investigate these red flags, they failed to consider whether to file SARs to report potentially suspicious transactions. At all relevant times, Respondent Keith Charles Moore (Moore) was the CEO at both firms responsible for supervising the business activities of Boustead and Sutter, and he was also the Anti-Money Laundering Compliance Officer (AMLCO) for both firms.
FINRA v. Boustead Securities, LLC (Case #2019060735601) – From March 2018 through March 2020, Boustead’s supervisory system, including written supervisory procedures (WSPs), was not reasonably designed to achieve compliance with Securities Exchange Act of 1934 (Exchange Act) Rule 17a-3 and FINRA Rules 4512, 2111, and 5110. As a result, Boustead failed to collect certain required account and investment profile information of its customers participating in private placement offerings. Boustead also failed to file or timely file certain required corporate offering filings. Therefore, Boustead violated Exchange Act Rule 17a-3 and FINRA Rules 3110, 4512, 5110, and 2010.
Gana Weinstein LLP has successfully handled hundreds of customer investment disputes with their brokerage firms. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free and we welcome all inquiries.