At Emily Carter Financial and Legal Analysis, we’ve been following a troubling trail. Elevation LLC, a broker-dealer headquartered in Charlotte, North Carolina, is currently under investigation by Haselkorn & Thibaut for allegations associated with their brokers (Elevation Securities).
Case Information and Impact on Investors
The nature of these allegations can’t be understated. Matters like these can have profoundly negative impacts on the lives of investors. More importantly, they betray the trust that’s so fundamental to these broker-client relationships. The Securities and Exchange Commission or SEC called for cease-and-desist proceedings against Elevation LLC on September 25, 2024. There were allegations that the firm had failed to provide a Form CRS to retail investors by specific deadlines in mid-2020.
In light of this event, I feel constrained to say, in the words of renowned investor Warren Buffett himself, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”.
Despite these warnings and subsequent charges, Elevation LLC supposedly did file their Form CRS, but allegedly, parts of the required information were suspiciously absent. Consequently, the SEC censured and fined Elevation a whopping sum of $60,000. Besides, the firm received an order to cease and desist from violations of Section 17(a)(1) of the Securities Exchange Act and Rule 17a-14 thereunder.
The Broker Dealer’s Background and Past Complaints
Elevation LLC operates primarily through its retail platform, Elevation Private Markets (EPM), offering investment options in late-stage companies aligned for an IPO. Despite facing multiple financial and ethical misconduct charges, the firm has maintained a steady clientele. However, investors now need to exercise extra caution, given the information released on the firm’s FINRA BrokerCheck page.
Did you know? According to a study by the Investor Protection Clinic at Yale Law School, over one-third of all brokers with a past regulatory disclosure still have a job in the industry.
Understanding the FINRA Rule in Simpler Terms
In a nutshell, firms are obligated to establish a supervisory system, with Written Supervisory Procedures (WSPs), that is sufficiently designed to comply with securities laws and FINRA rules aimed at preventing fraudulent trading. If Elevation LLC‘s WSPs were indeed lacking procedures for flagging fraudulent trading, it raises serious questions about the company’s ethics and responsibility towards its investors.
Consequences and Lessons Learned
Following these accusations, Elevation LLC had to consent to a censure and a further $75,000 fine. This is a serious figure, and one can only ponder about the depth of the allegations for such a hefty fine to be imposed. Sadly, for some unlucky investors, the financial repercussion has been significantly more palpable, with their life savings disappearing into thin air.
It’s essential to learn from such incidents. Always conduct your own due diligence about the brokers and firms you choose to engage with. It’s also crucial to understand that, although brokerage firms often push for FINRA arbitration, you have a voice and agency in these matters. You’re not limited to the arbitration process, and lawyers specializing in investment fraud can guide you towards other possible options for recovering your losses.
Remember, it’s your right to seek out all necessary information and to be savvy about where your money goes. It’s not just about making more – it’s about safeguarding what you already have.
