FINRA Reportedly Fines LifeSci Capital $900,000.
LifeSci Capital, LLC has reportedly agreed to pay a $900,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA).
The settlement allegedly stems from actions in 2020 and 2021, during LifeSci’s purported participation in an initial public offering for a special purpose acquisition company (SPAC). FINRA found that the firm allegedly received excessive underwriting compensation, which was mischaracterized in offering documents and reported inaccurately to FINRA.
A SPAC (Special Interest Acquisition Company) is a unique investment vehicles that raises capital through an IPO with the sole purpose of acquiring an existing company. In the past few years SPACs have become popular with retail investors because they allow them to invest in private companies without meeting certain wealth or income thresholds.
Additionally, LifeSci reportedly failed to file, or delayed filing, required documents with FINRA for three separate public offerings. These actions violated FINRA Rules 5110 and 2010.
Supervisory Failures
Since July 2014, the firm has also reportedly been in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010 by failing to establish an adequate supervisory system. This includes a lack of written supervisory procedures (WSPs) designed to ensure compliance with FINRA Rule 5110.
As part of the settlement, LifeSci Capital will also reportedly face censure and must undertake corrective measures. A senior management member who is a registered principal will be required to certify in writing that the firm has resolved the identified deficiencies and implemented a compliant supervisory system, including updated WSPs.
LifeSci Capital has been a FINRA member since June 2014 and is headquartered in New York, New York.
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Last modified: December 5, 2024
