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Miami Securities Broker Barred for Selling Unregistered Securities

On June 12th, 2018, the Financial Industry Regulatory Authority (FINRA) announced that Harold Lee Connell (CRD#: 1482623), a registered broker from Miami, Florida has been permanently barred from the securities industry.

From 2001 to 2017, Mr. Connell served as the CEO and President of CP Capital Securities, a broker-dealer that was headquartered in Miami. Last year, CP Capital Securities was expelled as a FINRA firm. This happened after serious allegations of misconduct arose related to private placement securities and unregistered securities promoted and offered by the firm.

In this post, our dedicated Miami investment fraud lawyers review the allegations against Mr. Connell. All information contained within this article has been sourced directly from FINRA’s official records. To read the full details of this case, please refer to Disciplinary Proceeding No. 2016051493702.

FINRA Sanctions: Harold Lee Connell  

Background 

From 2013 through late 2017, Mr. Connell and three other representatives of CP Capital Securities raised more than $4.5 million from investors. These funds were raised in connection with the sale of three different private, unregistered securities offerings. All three offerings were made under Regulation D, which allows some companies to sell securities without being required to register the securities with the Securities and Exchange Commission (SEC). In the official private placement documents, actual and prospective investors were informed that their money would be invested in various different companies and enterprises.

Violative Conduct 

FINRA investigators believe that Mr. Connell and his co-conspirators made several different material misrepresentations to investors. For example, with the first private offering, investors were informed that their money would be diversified over a range of companies. In reality, 85 percent of the money raised went into a single penny stock. Notably, this penny stock, like all penny stocks, was a high risk investment. In the other unregistered securities offerings, Mr. Connell and his company failed to inform investors that they were actually putting their money into ‘self-offerings’ where almost all of their money was simply transferred directly to CP Capital Securities and entities related to the brokerage firm. 

FINRA Enforcement Action  

FINRA contended that Mr. Connell and his company violated several different securities laws and industry regulations. Specifically, this broker is alleged to have:

  • Made material misrepresentations;
  • Omitted material facts;
  • Recommended unsuitable investments to customers;
  • Failed to adequately supervise other members of the firm; and
  • Violated SEC Rule 10b-5.

Without admitting or denying any of the allegations raised by FINRA, Harold Lee Connell consented to the sanctions proposed by the Department of Enforcement. He has accepted a permanent bar from the securities industry.

Get Help From our Miami Unregistered Securities Lawyers Today

At Carlson & Associates, P.A, our experienced investment fraud lawyers have helped many South Florida investors recover full and fair financial compensation for their illegitimate investment losses. If you lost money in a private placement or unregistered securities, we can help. For a fully confidential review of your claim, please call our Miami office today at 1-305-372-9700.

Resources:

brokercheck.finra.org/individual/summary/1482623

finra.org/sites/default/files/fda_documents/2016051493702%20Harold%20Lee%20Connell%20CRD%201482623%20AWC%20sl.pdf

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