Digital Offering LLC Broker, Mark Elenowitz, Suspended 30 Days By FINRA For Allegeding Engaging In Private Securities Transactions
Mark Elenowitz (CRD # 2057802) is a Financial Advisor at Digital Offerings LLC in Laguna Beach, CA. Mark Elenowitz has been in the securities industry since 1990 and previously worked at Tripoint Global Equities.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on May 29, 2020, Mark Elenowitz was sanctioned by FINRA, suspending him for a period of 30 days, fining him $15,000. According to the FINRA sanction:
“Without admitting or denying the allegations, Elenowitz consented to the sanctions and to the entry of findings that he recommended and sold participation interests in private placements (the offerings) to their customers, without having a reasonable basis to believe that their recommendations were suitable for at least some investors. The findings stated that Elenowitz did not have a reasonable basis to recommend these investments because he failed to conduct reasonable diligence on the offerings, the issuers of these investments, both of which purported to be in the business of purchasing and re-selling tickets to live concerts and theater events, and the principals who formed and managed the issuers. Elenowitz also failed to reasonably investigate and follow up on red flags that called into question the viability of the issuers’ business prospects and the principals’ ability to operate and manage a profitable ticketing resale business. Through the offerings, Elenowitz’s member firm raised over $16 million from 42 customers and generated nearly $500,000 in placement agent fees for the firm. The customers ultimately lost millions of dollars from investing in these offerings when it was later discovered that the principals used the issuers to conduct a Ponzi scheme. Elenowitz personally solicited one of the customers to invest in the offerings. The customer made investments totaling $500,000 based on Elenowitz’s recommendations. The findings also stated that Elenowitz failed to reasonably supervise the offerings. Elenowitz’s supervision of these offerings was not reasonable because he failed to enforce the firm’s WSPs with respect to private placement due diligence and failed to investigate and follow up on red flags that could have alerted him to the potential misconduct.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2017053409201%20Tripoint%20Global%20Equities%2C%20LLC%20CRD%20143174%20and%20Mark%20Elenowitz%20CRD%202057802%20Complaint%20va%20%282020-1593389967302%29.pdf
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
In addition, Mark Elenowitz has been the subject of two customer complaint disclosures, alleging sales practice misconduct. Among the complaints allege the following:
• March 2017—”Alleged failure to complete due diligence – December 2015 through March 2016.” The matter settled for $400,000.00.
• February 2017—”Alleges failure to complete due diligence and disclosure of commissions.” Alleged damages are $1,500,000.00 and the matter remains pending.
For a copy of Mark Elenowitz’s CRD, click https://brokercheck.finra.org/individual/summary/2057802#disclosuresSection
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at email@example.com.
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