Ex-Principal Securities Broker Allegedly Got Investors To Back Companies He Ran
John Krohn, a former Principal Securities broker, is now the subject of a $28M securities fraud complaint. The claimants contend that he persuaded them to invest in venture capital companies that he either controlled, owned, or oversaw.
Shepherd Smith Edwards and Kantas (SSEK Law Firm) is offering free, no-obligation initial case assessments to former Principal Securities customers of Krohn who sustained substantive losses while working with him.
John Krohn Was Suspended By FINRA For Securities Fraud
According to his BrokerCheck record, Krohn, who is currently not a registered financial representative, was a Principal Securities broker for over 20 years from 1996 to 2017.
In 2018, the Financial Industry Regulatory Authority (FINRA) suspended him for three months after finding that he took part in outside business activities and made $7.9M of private securities purchases away from the broker-dealer without giving it notification of these transactions.
FINRA contends that Krohn’s failure to notify Principal Securities about these purchases stopped the brokerage firm from being able to assess whether these purchases were a conflict of interest or if the public would think that they were part of its business. Krohn was fined a $10K penalty.
Krohn’s BrokerCheck record shows two other customer disputes, which were denied. One involved the alleged sale of a private placement that wasn’t a Principal Securities offering to a client. The other alleged the unsuitable sale of a variable annuity.
In December, WHOTV, which is based in Iowa where Krohn lives, published a news report featuring an investor who said that the ex-Principal Securities broker had persuaded him to invest in the pharmaceutical holding company, Spotlight Innovation. The investor, who contends that Krohn had told him to expect to make money, lost $50K.
Krohn is now accused of securities fraud and involvement in an alleged Ponzi scam.
Do You Have Grounds To Make An Inadequate Supervision Claim?
Broker-dealers are required to properly supervise their registered representatives. This includes overseeing a broker’s activities while that person is with the firm. Because of this, customers who lost money because of Krohn’s activities may have grounds for filing an inadequate supervision claim against Principal Securities.
If John Krohn or any other Principal Securities broker worked with you and you lost a substantial amount of money that you suspect may be due to broker fraud or negligence, contact our broker fraud lawyers at SSEK Law Firm today.