Former Brokerage CEO Had Enough with Finra Probes, Accepts Bar
Thomas Brenner, Jr., on Monday accepted a permanent bar from the securities industry following more than four years of investigations into sales, supervisory and due diligence lapses involving sales of private placements to retail customers of the now-defunct First American Securities, where he had been chief executive.
His decision to accept a permanent bar after a 30-year brokerage industry career contrasts with the successful attempt of his colleague Christopher Parris to have his bar by the Financial Industry Regulatory Authority last summer by the Securities and Exchange Commission. Parris, who owned 50% of First American’s parent company, is still subject to a Finra suspension.
“Mr. Brenner decided he didn’t want to deal with it anymore,” said Alan Wolper, a Chicago-based lawyer who represented Brenner and Parris in their separate cases. “It is so far in his rearview mirror he doesn’t care, and didn’t feel the need to spend the time, money or effort. He has no intention of remaining affiliated with a Finra member firm.”
Brenner’s decision to capitulate makes it impossible to determine how damning Finra’s evidence against him may have been, but does underscore the financial and psychological difficulties of fighting a determined regulator, said lawyers and brokers who spoke on condition of anonymity. Brenner, who lives in the Grand Rapids, Michigan, area and is in his 50s, according to internet records, could not be reached for comment in that city or in Orrville, Ohio, where First American was based.
Brenner had agreed last August to pay Finra a $30,000 penalty, disgorge $189,000 and accept a 16-month suspension until December 2017, without admitting or denying Finra’s findings that his sale of two separate private placements were “rife with supervisory and substantive violations.”
According to the consent letter accepted by Finra on Monday, Brenner has been permanently barred for refusing to provide testimony in a new investigation of complaints “from numerous investors” in three private placements who were concerned about their inability to contact issuers of the securities and their inability to liquidate or redeem investments.
“These investors were generally members of Brenner’s hometown community in Ohio, and many of the investors were seniors,” according to the order published on the regulator’s disciplinary action website. Finra technically barred him for violating its Rule 8210 requiring participation of member firms’ associated persons in probes as well as its catchall Rule 2010 requiring high standards of commercial honor and just and equitable principles of trade.”
Wolper, Brenner’s lawyer, said that to the best of his knowledge the initial two private placements sold by First American were “legitimate” and that investors will receive redemption payments as scheduled. Finra alleged that the three investments sold or overseen by Brenner were issued by persons or entities with whom he had personal or business relationships.
Wolper said Brenner and First American primarily sold mutual funds. Finra expelled First American in March, and in recent settlements with other of the firm’s brokers and supervisors has said that the firm raised $3.25 million from 76 investors in one private placement issue without giving them proper disclosure documents. In another settlement with a former compliance officer it said that a broker whose initials were TB sold $1.645 million of notes to 20 customers in return for $189,000 in commissions.
Thomas Brenner began his career as a registered representative with Edward Jones in 1986, worked for 16 years through 2007 at Raymond James’ independent brokerage channel, and also did stints at indie firms First Allied Securities and Capstone Financial Group before joining First American in 2011, according to his BrokerCheck record. Finra’s consent letter lists Brenner’s middle initial as “J” while its BrokerCheck database lists his middle name as Edward.