Securities Lawyers Blog
We represent clients of financial advisors and brokerage firms in investment disputes against their firms, such as Chardan Capital Markets LLC. Our services cover a wide spectrum of broker misconduct, including unsuitable investments, failure to supervise, and losses in various investment products. Our firm can analyze your brokerage accounts, determine the extent of your investment losses, and understand the issues and remedies available.
Chardan Capital Markets is an investment bank and broker-dealer focused on healthcare and disruptive technology that provides underwriting, advisory, private placements, research, and principal and agency trading for corporate and institutional clients. Founded in 1995 and headquartered at One Pennsylvania Plaza in New York, the firm is wholly owned by Chardan Securities and has additional offices including Miami, Dallas, and London.
Chardan Capital Markets LLC – By the Numbers:
- CRD #: 120128
- Regulatory Events: 14
- Broker Employees: 42
Chardan Capital Markets LLC – In the News:
FINRA v. Chardan Capital Markets LLC (Case #2017054925801) – NASD Rule 2711 primarily addresses conflicts of interest that arise when research analysts work for firms that have investment banking or other business relationships with subject companies, or when analysts or firms own securities of subject companies or make a market in those securities. The rule implemented structural reforms designed to increase analysts’ independence and further manage conflicts of interest, and required increased disclosure of conflicts in research reports and public appearances. FINRA Rule 2241, which replaced Rule 2711 in 2015, generally retains the core provisions of Rule 2711 and, among other things, broadens the obligations on members to identify and manage research-related conflicts of interest. From March 5, 2013 through August 31, 2016 (the “Review Period”), Chardan violated certain research report disclosure requirements of FINRA Rule 2241 and NASD Rule 2711 (collectively, the “Research Rules”), and failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to achieve compliance with those rules. Specifically, Chardan improperly published at least 103 research reports that contained 123 disclosure deficiencies, including failing to accurately disclose investment banking relationships, in violation of FINRA Rules 2241(c) and 2010, and NASD Rule 2711(h). The Firm’s disclosure failures were the result of Chardan’s failure to establish and maintain a supervisory system and written supervisory procedures reasonably designed to achieve compliance with the disclosure requirements of the Research Rules. By this conduct, the Firm violated FINRA Rules 3110(a), 3110(b)(1) and 2010, and NASD Rules 2711(i), 3010(a) and 3010(b)(1). Also, during the Review Period, Chardan failed to enforce written supervisory procedures reasonably designed to achieve compliance with provisions of the Research Rules that require firms to manage conflicts of interest between research analysts and those engaged in investment banking services. These failures involved the supervision of the Special Equities Group (“SEG”), which was a subgroup of the Firm’s investment banking department during the Review Period. Chardan’s supervisory failure created the risk that research analysts could be inappropriately influenced by the Firm’s interest in attracting and maintaining investment banking business. By this conduct, the Firm violated FINRA Rules 2241(b)(1), 2241(b)(2)(G), 2241(b)(2)(M)(i), 3110(b)(1) and 2010, and NASD Rules 2711(i) and 3010(b)(1).
FINRA v. Chardan Capital Markets LLC (Case #2015046871503) – The Financial Industry Regulatory Authority’s (“FINRA”) Department of Market Regulation, Offering Surveillance Group (“staff”), conducted a review of the firm’s compliance with Rules 101 and 104 of SEC Regulation M; rules promulgated by FINRA and other SROs requiring that the firm provide various notices to the relevant SROs as a result of the firm’s participation in a distribution of securities; and related supervisory requirements during the period of November 28, 2014, through September 30, 2015 (the “review period”). The staff’s review was conducted for FINRA, NYSE Arca, Inc. (“NYSE Arca”), and Nasdaq Stock Market LLC (“Nasdaq”). During the review period, the firm failed to comply with Rule 101; NASD Rule 3010 (for conduct prior to December 1, 2014) and FINRA Rule 3110 (for conduct on or after December 1, 2014); and FINRA Rules 5190(c)(1)(A) and (B), and 2010.
FINRA v. Chardan Capital Markets LLC (Case #2011030509803) – In connection with Matter No. 20110305098, the Market Manipulations Investigation staff of the Department of Market Regulation (the “staff”) reviewed the firm’s compliance with supervisory requirements applicable to reviews for prohibited transactions and practices in proprietary accounts, including potential transactions to “mark” the closing prices of securities. During October 2009 through February 2014 (the “review period”), the firm failed to conduct reviews for potential marking-the-close activities, as required by its written supervisory procedures. The firm relied upon reports to monitor for potential marking-the-close activities, but the reports utilized by the firm to monitor orders placed by its traders did not include transactions in securities traded in two over-the-counter markets. As a result, the firm failed to enforce its supervisory system, including its written supervisory procedures, by failing to reasonably supervise the activities of its proprietary traders on the two OTC markets and, from October 2009 through February 2014, specifically failed to detect and prevent potential marking-the-close activities by its proprietary traders. Thus, the firm violated NASD Rule 3010 and FINRA Rule 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.