FINRA Expels DT Securities and Its CEO Over Alleged Private Placement Misrepresentations

The Financial Industry Regulatory Authority has expelled the real estate firm formerly called DT Securities and its owner/CEO Markel Newton. According to the regulator, the firm and Newton engaged in negligent misrepresentations involving private placements. Markel is also barred for alleged violations involving two of the firm’s offerings to purchase real estate in Georgia and Florida, as well as a third one involving alcoholic treatment facilities in California.

According to FINRA, in the private placement offerings Fresh Start, DT Atlanta, and DT Florida, Markel and DT should have disclosed that the California Department of Real Estate had submitted a complaint against him in 2010. The complaint against Markel and DT Ventures Real Estate Investments accused them of performing certain activities without the required real estate license, as well as making misrepresentations about deposits made for purchase to sellers. In 2011, Markel consented to a 30-day suspension.

In addition to accusing Markel of not alerting the state, FINRA also accused Markel of improperly releasing escrow proceeds to purchase properties prior to satisfying funding-raising goals that were delineated in two of the private offerings. The settlement document said that although DT Florida had originally aimed to raise at least $3M by the end of November in 2009, that closing date was extended to 1/29/10. The funds were to go back to investors if that figure wasn’t achieved. The private placement offering put into effect by DT Atlanta in 2011 came with the goal to raise a minimum of $1.7M—a figure that was later lowered to $400K. That lower figure was reportedly never properly fulfilled.

 

In the Fresh Start private placement memorandum, said FINRA, Markel didn’t tell investors of a previous judgment against him for breach of duty to pay back a $1.9M credit line with Pacific Western Bank. Fresh Start was the offering involving the California treatment centers. It sought to raise up to $2M from investors.

In its notice, FINRA stated that leaving out material information and making material misrepresentations is not in alignment with “high standards of commercial honor.”

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 Read the Settlement Notice, FINRA

Finra expels real estate investment firm known as DT Securities and its CEO, InvestmentNews, September 26, 2016