Dalmore Group LLC
History Of Dalmore Group LLC
Dalmore has been registered with FINRA since November 2005. The firm’s headquarters
is in Woodmere, New York and it has approximately 40 registered representatives in
three branches. Dalmore’s primary business line is investment banking, mainly dealing
with private placements.
Dalmore Group LLC Report
FINRA Rules 3110 and 2010 — Failure to Establish and Maintain a Supervisory
System and Procedures Reasonably Designed to Ensure Compliance with FINRA
Rules
FINRA Rule 3110(a) requires that FINRA members “establish and maintain a system to
supervise the activities of each associated person that is reasonably designed to achieve
compliance with applicable securities laws and regulations, and with applicable FINRA
rules.” FINRA Rule 3110(b) requires that each FINRA member “establish, maintain, and
enforce written procedures to supervise the types of business in which it engages and the
activities of its associated persons that are reasonably designed to achieve compliance
with the applicable securities laws and regulations, and with applicable FINRA Rules.” A
violation of FINRA Rule 3110 also constitutes a violation of FINRA Rule 2010, which
requires member firms to “observe high standards of commercial honor and just and
equitable principles of trade.”
A broker-dealer has a duty to conduct a reasonable investigation concerning any private
placement offering that it recommends and sells to its customers. FINRA Regulatory
Notice 10-22 explains that the amount and nature of the investigation turns on various
factors, including, but not limited to, “the nature of the recommendation, the role of the
broker in the transaction, its knowledge and relationship to the issuer, and the size and
stability of the issuer.” Regulatory Notice 10-22 further reminds firms that they must
have supervisory procedures that are reasonably designed to ensure, among other things,
that the firm’s personnel investigate each private placement the firm recommends and
that they do so in a manner that is sufficiently rigorous to comply with all legal and
regulatory requirements. The Regulatory Notice additionally states that broker-dealers
should retain records documenting both the process and results of its investigation.
Between March 2017 and December 2018, Dalmore’s written supervisory procedures
required that the Firm, before it recommended a private offering to any customer,
conduct an investigation related to several areas of review, including the issuer’s
management, business prospects, assets, use of proceeds, and the syndicate managers for
the offering.
For two private placement offerings that Dalmore recommended and sold to customers
between March 2017 and December 2018, the firm failed to conduct and document
reasonable investigations of the offerings before recommending these securities to
customers. The firm failed to review any business plans or models, prospects for the
industry, any existing or potential regulatory restrictions on the business and the
competitive position of the issuer. Further, the firm, rather than conducting an
independent investigation, relied almost exclusively on documentation and information
the issuers provided. As a result, the firm failed to uncover relevant information
regarding the issuer. For example, for one offering, the firm failed to identify a securitiesrelated litigation against a key director and officer of the issuer.
Therefore, Dalmore violated FINRA Rules 3110 and 2010.1
FINRA Rule 5123 — Late Private Placement Filings
FINRA Rule 5123 requires that a member that sells a security in a non-public offering in
reliance on an available exemption from registration under the Securities Act of 1933
must: (i) submit to FINRA, or have submitted on its behalf, a copy of any private
placement memorandum, term sheet or other offering document, used in connection with
such sale within 15 calendar days of the date of first sale, or (ii) notify FINRA that no
such offering documents were used. Rule 5123 was implemented to “enhance oversight
and investor protection” and provide “more timely and complete information about the
private placement activities of firms on behalf of other issuers.”2A violation of FINRA
Rule 5123 is also a violation of FINRA Rule 2010.
Between April 2017 and February 2019, Dalmore failed to make timely filings with
FINRA related to 26 private placements sold by the firm. Instead of filing offering
documents within 15 calendar days of the date of first sale, the firm made its filings from
16 days to 335 days after the date of the first sale.
Therefore, Dalmore violated FINRA Rules 5123 and 2010.
Penalties, Punishments & Sanctions
a censure; and
■ a $40,000 fine.
Respondent agrees to pay the monetary sanction upon notice that this AWC has been
accepted and that such payment is due and payable. Respondent has submitted an
Election of Payment form showing the method by which it proposes to pay the fine
imposed.
Respondent specifically and voluntarily waives any right to claim an inability to pay, now
or at any time after the execution of this AWC, the monetary sanction imposed in this
matter.
Dalmore Group LLC Review
Between March 2017 and December 2018, Dalmore failed to establish and maintain a
supervisory system, including written supervisory procedures, reasonably designed to
ensure that the firm complied with its due diligence obligations, in violation of FINRA
Rules 3110 and 2010. From April 2017 through February 2019, Dalmore also failed to
submit required offering documents to FINRA within 15 calendar days of the date of first
sale for 26 private placements, in violation of FINRA Rules 5123 and 2010.
Who is the Financial Adviser?
A financial adviser or advisor is a professional who offers financial services to clients based on their financial situation. In several countries, financial advisors have to finish specific training and register with a regulatory body to provide advice.
How To Spot A Fraud Finance Advisor (Infographic)
Help For Victims Of Dalmore Group LLC
If you have lost funds because of misrepresentation, unsuitable investment, or unsuitable investment strategy from Dalmore Group LLC. Then you can take legal action and get justice. Fraud, Malpractice & dereliction of duty should not be taken lightly, especially in this industry. We highly suggest that you notify authorities or seek legal action if your financial advisor or brokerage firm fails to abide by FINRA’s rules are regulations.
Financial advisors are regulatory & legally obligated to suggest (recommend) the most suitable investments/investment strategies to their clients. Their suggestions should have their client’s best interests and should be appropriate for their client’s goals and needs. Similarly, the brokerage firm which hires financial advisors also has a regulatory & legal obligation to keep a close watch and supervise their Financial Advisors’ practices & behavior. They need to make sure that the financial advisor is not being manipulative or having an unreasonable bias towards certain investments. If the financial advisor and/or the brokerage firm breaches these duties, then the client/customer may be entitled to a full or partial recovery of their losses.
Financial advisors need to have the interest of their clients when giving suggestions related to investments and investment strategies. Reasonable basis suitability requires the advisor to do their best to analyze & identify the risks and rewards associated with their suggested investment and/or investment strategy.
Dr. Henrique Duck, PhD in Media Studies and Critical Theory, specializes in writing detailed critics stories and reviews. He has contributed to prominent newspapers and websites, providing insightful analysis of media content and its effects on society.
