FINRA Expels North Miami Securities Firm
On August 26th, 2024, the Financial Industry Regulatory Authority (FINRA) announced the expulsion of a Miami-based securities company called Bananafina LLC from the securities industry (FINRA Case #2023077678601). FINRA determined that the firm failed to substantially cooperate with an investigation into its practices in violation of securities industry rules. Here, our Miami securities fraud attorney provides a more detailed overview of the enforcement action.
Bananafina LLC Became a FINRA Registered Funding Portal in 2021
Bananafina LLC was a company that was based in North Miami, Florida. It operates primarily through an online platform named Equity Portal—which focuses on crowdfunding initiatives. Notably, Bananafina LLC was registered as a funding portal under Regulation Crowdfunding (Reg CF) of the JOBS Act. That specialized regulation allowed qualifying small businesses to raise capital directly from public investors.
FINRA Conducted a Routine Examination of its Practices
After its registration as a funding portal, FINRA conducted a routine examination of the practices of South Florida’s Bananafina LLC. At the preliminary level, FINRA found a number of different issues related to a certain securities offering from the company. Issues were raised regarding the alleged failure to maintain a supervisory system that complied with FINRA’s rules and potential violations related to the reporting of fractional share trades.
Bananafina LLC Ceased Cooperating With an Investigation into a Securities Offering
Initially, Bananafina LLC cooperated with FINRA’s investigation. However, that changed. FINRA determined that the firm stopped materially cooperating with key aspects of its investigation in 2023. The firm’s refusal to provide necessary documents and information stalled the investigation process. FINRA took enforcement action based on the failure to cooperate—which is a direct violation of securities industry regulations.
The Findings: Violation of FINRA Rule 8210
Rule 8210 is a regulation that allows representatives from FINRA to require persons associated with FINRA member firms to provide information, testify, or produce documents in connection with any investigation, complaint, examination, or proceeding. The rule is considered to be one of the most important in the industry as it is foundational for FINRA’s ability to conduct regulatory oversight and enforce compliance with securities laws.
Among other things, FINRA Rule 8210 helps to confirm that FINRA can access necessary information to investigate potential rule violations. The failure to comply with requests under FINRA Rule 8210 is a serious matter. It can lead to major penalties, including suspension or expulsion from the securities industry. In this case, Bananafina LLC was cited by FINRA for a violation of Rule 8210.
Miami-Based Funding Portal Expelled from Industry By FINRA
Without admitting to or denying any of the specific allegations raised against it, Bananafina LLC consented to FINRA’s proposed penalties. Most notably, the North Miami-based firm has been permanently expelled from the securities industry.
Set Up Your Confidential Consultation With Our Miami Securities Fraud Lawyer Today
At Carlson & Associates, P.A., our Miami securities fraud attorneys fight to protect the rights of investors. If you sustained financial losses because a brokerage firm violated industry rules, we are here to help. Give us a phone call now or connect with us online for a confidential initial case evaluation. We provide investment fraud representation to investors throughout South Florida.
Source:
finra.org/sites/default/files/fda_documents/2023077678601%20Bananafina%20LLC%20CRD%20309121%20AWC%20gg%20%282024-1727396416674%29.pdf
