Shopoff Securities investigated by FINRA; Promissory Notes sold from 2010 to 2017 under review.
On January 10, 2019 FINRA opened a regulatory investigation against Shopoff Securities of Irvine, CA and its principals, William Shopoff and Stephen Shopoff concerning the sale of promissory notes. FINRA charged that Shopoff Securities sold over $12 million of personally guaranteed promissory notes to 29 investors.
Among the claims made are that the funds raised by Shopoff Securities were used to pay returns to prior investors, and that the transactions were unsuitable for the purchasers. Using funds raised to repay prior investors could be indicative of a Ponzi scheme. FINRA Rule 2111 requires that all recommendations to purchase securities made to clients must be suitable.