President Glen Anderson sanctioned along with Rainmaker Brokerage Firm
With six branches and 34 registered persons, Rainmaker Securities, LLC is in hot water with both FINRA and the SEC. Its president, Glen Anderson, is also included in the sanctions brought against the firm, according to official FINRA documents. The allegations include failure to devote appropriate time, attention and resources to supervision of its financial advisors, among other allegations.
Rainmaker Securities was registered with FINRA in 2005, and Anderson joined the brokerage firm as President in 2010. Rainmaker is approved to conduct business in the origination and sale of private placements. It is alleged that between June 2011 and September 2014, the firm—under Anderson’s direction—consistently violated FINRA rules that required the firm to:
- Establish and maintain a supervisory system reasonably designed to achieve compliance with securities laws and regulations
- Establish, maintain and enforce written supervisory procedures to supervise its brokers.
The regulatory agency investigation into the firm’s activity claims that there were violations in the areas of solicitation, false advertising, suitability and due diligence, among others. The firm is alleged to have sold the following private placement securities offerings:
- Buttonwood Social Network Fund LLC (Facebook Fund)
- Eudora Global LLC (Eudora Global)
- The Incubation Factory Technology Fund, LLC (TIF Fund)
- The Idea Fund LLC (IDEA Fund)
According to FINRA, when marketing and selling these offerings, the firm’s supervisory procedures required certain due diligence be performed, such as obtaining information about the issuer to determine proper suitability. FINRA also found that the firm’s policies required the firm to:
- Question or assess the reasonableness of any assumptions underlying the issuer’s projections
- Review the issuer’s material agreements
- Inquire about the existence and status of any litigation involving the issuer
- Review any public filings regarding the issuer
- Complete a Private Placement Compliance Checklist
It was determined by FINRA that Rainmaker Securities and Anderson did not follow or enforce the required supervisory procedures and did not perform adequate due diligence. As a result of the allegations, Rainmaker Securities has been censured and fined $125,000. Anderson was fined $10,000 and was issued a 2-month suspension from participating in the securities industry.
If you have been a victim of the misconduct of Rainmaker Securities, LLC, Glen Anderson or any other firm or financial adviser, Silver Law Group may be able to help. Many investors who may be entitled to loss recovery do not know their legal rights, but the attorneys at Silver Law Group are skilled and experienced in securities arbitration and we are dedicated to helping people like you navigate your options. Contact us today for a complimentary case review with one of our experienced securities arbitration attorneys.