The NASD has fined Boston Capital Securities $1.2 million for improper financial disclosure and compensation, as the firm continued to sell limited partnerships to the public even though the NASD issued it a deficient notice.
"Full and accurate disclosure of material information in public offering documents is critical for the operation of our capital markets," said James Shorris, senior vice president and acting head of enforcement. "NASD's corporate financing rules are designed to ensure that the required disclosures are made to investors and that the terms of each underwriting are fair and reasonable."
The NASD found that in 2004 and 2005, Boston Capital Securities conducted public offerings of about $60 million in limited partnership investments, and neglected getting the necessary clearance from the NASD.
Even after the firm received notice from the NASD's corporate financing department that it needed to provide additional information, Boston Capital continued the public offerings.
Separately, the NASD found that the firm also received $700,000 for underwriting compensation in 2002, and that it inaccurately disclosed this information in its prospectus in 2002.