Investigating Claims Involving Patrick Capital Markets and Private Placement Sales
The White Law Group is investigating potential securities claims involving Patrick Capital Markets, LLC (CRD#: 16518), a FINRA-registered broker-dealer headquartered in St. Louis, Missouri. The firm has been a member of FINRA since 1985 and has acted as a managing broker-dealer for private placement offerings marketed to accredited investors.
FINRA Sanction – Contingency Offerings & Misuse of Investor Funds
According to a Letter of Acceptance, Waiver, and Consent (AWC) accepted by FINRA in December 2024, Patrick Capital Markets was sanctioned for willfully violating Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-9, as well as FINRA Rule 2010. The alleged misconduct involved three contingency offerings between September 2018 and December 2019.
FINRA found that Patrick Capital failed to terminate two offerings and return investor funds when material terms were changed, including reductions in the minimum contingency amounts required to close the offerings. In a third case, the firm prematurely released investor funds before the required minimum contingency was met. These actions rendered false the offering representations that investor funds would be returned if the minimum thresholds were not reached. In total, Patrick Capital released approximately $12.2 million to one issuer and $5 million to another despite the changes.
As a result of these violations, FINRA imposed a censure and an $80,000 fine on the firm.
Risks of Private Placements
Private placement offerings, such as those managed by Patrick Capital, are often high-risk and unsuitable for many retail investors. These investments are illiquid and not traded on public markets, making them difficult to sell if cash is needed. They also typically involve steep commissions and fees, which may exceed 9% and substantially erode returns. In addition, because these offerings are often tied to real estate or niche ventures, they can be highly speculative, and investors may face the complete loss of principal.
Broker Misconduct – Sanford Simmons, Jr.
One broker previously affiliated with Patrick Capital Markets was Sanford “Sandy” Simmons, Jr. (CRD#: 1018907). According to his FINRA BrokerCheck profile, Simmons worked with Patrick Capital during multiple periods between 2018 and 2022. FINRA barred Simmons in October 2024 after he refused to cooperate with an investigation into his sales of unsuitable real estate-based Regulation D private placements.
Simmons has been the subject of multiple customer complaints alleging breach of duty and unsuitable investment recommendations. At least one case was settled for $35,000, and other disputes involved millions in alleged damages. Investors who worked with Simmons may have been exposed to high-risk Reg D products similar to those involved in Patrick Capital’s sanction.
Failure to Supervise
Brokerage firms such as Patrick Capital have a duty to adequately supervise their financial advisors. They are required to have systems in place to detect potential misconduct and ensure that brokers are complying with securities laws. When firms fail to monitor their representatives and misconduct occurs, they may be held liable for investor losses through FINRA arbitration.
FINRA Arbitration vs. Class Action
Investors considering legal recovery may wonder whether to pursue a class action or an individual FINRA arbitration claim. While class actions are sometimes used for small claims that are not practical to bring individually, investors with larger losses—often above $100,000—are usually better served by filing individual FINRA arbitration claims. Arbitration cases are typically faster and allow for tailored presentations of an investor’s unique circumstances.
National Securities Fraud Attorneys
If you have suffered investment losses with Patrick Capital Markets, LLC or with Sanford “Sandy” Simmons, Jr., the securities attorneys at The White Law Group may be able to help. Our firm has handled over 800 FINRA arbitration cases nationwide. With offices in Chicago, Illinois and Seattle, Washington, we represent investors across the country in claims against broker-dealers.
For a free consultation with a securities fraud attorney, please call The White Law Group at (888) 637-5510 or visit us online at www.whitesecuritieslaw.com.
FAQs – Patrick Capital Markets
What happened to Patrick Capital Markets, LLC?
FINRA sanctioned Patrick Capital in 2024 for willful violations of federal securities laws related to private placement offerings. The firm was censured and fined $80,000.
Who is Sanford Simmons, Jr.?
Simmons is a former financial advisor who was barred by FINRA in October 2024. He has been the subject of multiple investor complaints tied to unsuitable recommendations of Regulation D private placements.
Can I recover my losses?
Possibly. If you invested with Patrick Capital or Sanford Simmons and suffered losses, you may be able to file a FINRA arbitration claim. Recovery depends on the facts of each case, including suitability of the investment and the broker’s conduct.
