Rainmaker Securities Review: FINRA Sanctions, Private Placement Concerns

Rainmaker Securities Review: FINRA Sanctions, Private Placement Concerns & Investor Complaints

Rainmaker Securities, LLC (CRD #132995) has been a FINRA-registered broker-dealer since March 18, 2005. The firm is approved to originate and sell private placements and operates approximately six branch offices with 34 registered representatives.

Rainmaker’s regulatory history includes multiple FINRA sanctions tied to private placement due diligence, general solicitation, and supervisory failures — areas that can directly impact retail investors.

2015 FINRA Sanction: Due Diligence & General Solicitation Violations

In September 2015, Rainmaker Securities and principal entered into an Acceptance, Waiver and Consent (AWC) with FINRA.

Sanctions:

• Rainmaker: Censured and fined $125,000

• The principal: Fined $10,000 and suspended for two months in a principal capacity

FINRA’s Findings

FINRA found that Rainmaker and the principal:

• Failed to enforce written supervisory procedures (WSPs) requiring adequate due diligence for unregistered private offerings

• Marketed and sold private placements without evidencing sufficient due diligence

• Failed to complete required private placement compliance checklists

• Engaged in general solicitation without a pre-existing substantive relationship with investors

• Distributed communications that were not fair and balanced and contained exaggerated or misleading statements

• Failed to prominently disclose the firm as the broker-dealer in marketing materials

FINRA also found violations of Section 5 of the Securities Act of 1933 related to improper general solicitation.

Private placements are high-risk, illiquid investments. Broker-dealers are required to conduct meaningful due diligence before offering them to investors.

2018 FINRA Sanction: Failure to Record Customer Information

In January 2018 (FINRA Case #2016048232401), Rainmaker was censured, fined $30,000, and required to revise its supervisory procedures.

FINRA found the firm failed on dozens of occasions to record required customer information, including:

• Age

• Employment status

• Income

• Net worth

• Investment objectives

These deficiencies involved customers participating in primary and secondary transactions in securities exempt from registration, including private placements.

FINRA concluded that the firm’s supervisory system was not reasonably designed to achieve compliance.

Accurate customer information is essential to determine whether an investment recommendation is suitable.

What Do These Rainmaker Securities Complaints & Sanctions Mean?

Rainmaker’s disciplinary history centers on:

• Inadequate private placement due diligence

• Improper general solicitation

• Misleading marketing materials

• Supervisory failures

• Incomplete customer suitability records

When firms fail to conduct proper due diligence or maintain accurate customer profiles, investors may be exposed to unsuitable, speculative, or illiquid investments.

Can You Recover Losses from Rainmaker Securities?

If you suffered losses involving:

• Rainmaker private placements

• Unregistered securities offerings

• Alternative or exempt securities

• Illiquid investments

you may have the right to pursue recovery through FINRA arbitration.

FINRA arbitration allows investors to bring claims against brokerage firms for unsuitable recommendations, failure to supervise, inadequate due diligence, and misrepresentations.

Free Consultation with The White Law Group

With offices in Seattle, Washington and Chicago, Illinois, The White Law Group represents retail investors nationwide in cases involving broker misconduct, supervisory failures, and private placement losses.

If you have concerns regarding Rainmaker Securities complaints, lawsuits, or regulatory sanctions, we encourage you to contact our firm for a free, confidential consultation.

Contact The White Law Group today to discuss your potential recovery options at 888-637-5510.

FAQs About Rainmaker Securities

1. Has Rainmaker Securities been sanctioned by FINRA?

Yes. Rainmaker Securities has been censured and fined by FINRA, including a $125,000 fine in 2015 for failing to enforce due diligence procedures for private placements and engaging in improper general solicitation. The firm was also fined $30,000 in 2018 for failing to properly record required customer information.

2. What is general solicitation and why does it matter?

General solicitation involves broadly marketing private offerings to investors without a pre-existing substantive relationship. In certain offerings, this can violate federal securities laws. Improper solicitation may increase the risk that unsuitable or high-risk investments are sold to retail investors.

3. What are private placements?

Private placements are securities offerings exempt from SEC registration. They are often illiquid, speculative, and subject to less regulatory disclosure than publicly traded securities. Because of these risks, broker-dealers must conduct adequate due diligence before recommending them.

4. Can I file a lawsuit against Rainmaker Securities?

Most disputes with broker-dealers like Rainmaker Securities are resolved through FINRA arbitration, not court. If you suffered investment losses related to private placements or unsuitable recommendations, you may have a claim.