FINRA Sanctions Tripoint CEO For Unsuitable Private Placements
Mark Harris Elenowitz of New York New York, the Chief Executive Officer of Tripoint Global Equities, has been fined $15,000.00 and suspended for one month from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity according to a FINRA Office of Hearing Officer’s Order Accepting Offer of Settlement containing findings that Elenowitz gave bad advice to a customer of Tripoint concerning private placements. Department of Enforcement v. Tripoint Global Equities LLC and Mark Elenowitz. Disciplinary Proceeding No. 2017053409201 (July 24, 2020).
According to the Order, between November of 2015 and August of 2016, when Elenowitz was Chief Executive Officer of Tripoint, he advised customers to purchase participation interests in four private placements despite Tripoint and Elenowitz lacking an adequate foundation to conclude that their investment recommendations were appropriate for investors.
The Order stated that when investment recommendations were made by Elenowitz and Tripoint, there was no due diligence conducted on the offerings themselves or due diligence conducted into the issuers of the offerings as well as the issuer’s principals. The issuers were supposedly operated by two principals who were in the business of buying and selling tickets to theater events and concerts. The principals and the issuers were not vetted by Elenowitz and Tripoint. There was no adequate investigation by Elenowitz and Tripoint in regard to the risks of those issuers with respect to their operations and their business prospects.
The Order stated that $16,000,000.00 was raised by those issuers from 42 customers which allowed Tripoint to obtain $500,000.00 in placement agent fees. FINRA revealed that the offerings were a sham and that customers collectively sustained a multi-million dollar loss. The issuers had been used by those two principals to carry out a Ponzi scheme. The Order stated that one customer was directly urged by Elenowitz to invest in those offerings which resulted in the customer’s $500,000.00 contribution.
FINRA’s Office of Hearing Officers determined that Elenowitz’s unsuitable investment recommendations were violative of FINRA Rules 2010 and 2111.
The Office of Hearing Officers also determined that there was a lack of supervision by Tripoint with regard to suitability. The regulator pointed out that Elenowitz and Tripoint ignored the securities broker dealer’s written supervisory procedures regarding the due diligence to be performed on private placements which included the review of red flags relating to the transactions. Elenowitz and Tripoint’s supervisory failures were violative of FINRA Rules 2010 and 3110(a) and (b).
FINRA Public Disclosure indicates that Elenowitz has been identified in two customer initiated investment related disputes pertaining to allegations of his misconduct while employed by Tripoint. On February 8, 2017, a customer filed an investment related civil action in the United States District Court in regard to Elenowitz in which the customer requested $1,500,000.00 in damages supported by allegations that commissions were not disclosed on private placement transactions and that there was a lack of due diligence on those private placements before they had been sold to the customer. Civil Action No. 1-17-876 (Feb. 8, 2017).
Elenowitz is also the subject of a customer initiated investment related civil action filed in the United States District Court which was resolved for $400,000.00 in damages based upon accusations that due diligence was not performed on the private placement investments held by the customers from December of 2015 to March of 2016 because of Elenowitz. Civil Action No. 1:17-cv-01962 (Oct. 30, 2018).
Elenowitz’s employment with Tripoint was terminated on May 12, 2020. Since March 13, 2020, he has been registered with Digital Offering LLC and Cambria Capital LLC.