Securities Arbitration Lawyer Blog
FINRA has suspended former Lakeridge Capital Inc. broker John Braddock from the securities industry for 5 months for preparing and distributing a private placement memorandum that negligently misrepresented and omitted facts relevant to an investment in a private placement. The alleged misconduct is said to have taken place between September 2018 and April 2021.
If you have lost money with John Braddock, or Lakeridge Capital Inc., contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as Lakeridge Capital Inc.
FINRA Letter of Acceptance, Waiver, and Consent (“AWC”)
John Braddock and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on June 17, 2021.
The AWC indicates that beginning in September 2018, Braddock solicited prospective investors to purchase equity interests in a private placement of Company A, whose business purpose was to export beverages from the United States to foreign markets. Braddock, who was Company A’s founder, chairman, and CFO, prepared the private placement memorandum for the offering, which was reviewed and approved by Lakeridge Capital. Braddock distributed the private placement memorandum to numerous prospective investors, some of whom became Lakeridge Capital customers. The private placement memorandum contained two types of negligent misrepresentations or omissions of material fact.
First, the private placement memorandum failed to disclose that Braddock had declared bankruptcy in June 2017 and entered into a debt reorganization and repayment plan that was confirmed in April 2018, prior to when Braddock began soliciting investors. His bankruptcy (which remained pending throughout the private placement offering) was a material fact that should have been disclosed to investors, given the other statements in the private placement memorandum about his financial background. For example, the private placement memorandum stated that Braddock had “over 35 years” of financial and business experience and, together with his partners, had “engaged in over $2 billion” of financial and fundraising transactions. Given such statements, Braddock’s recent bankruptcy was a material fact that should have been disclosed to investors.
Second, the private placement memorandum negligently misstated that another company owned and controlled by Braddock (Company B) had invested approximately $1.13 million of “earnings,” including approximately $280,000 of “working capital,” in Company A. In fact, Company B had not invested any cash in Company A. The “earnings” and “working capital” reflected, instead, Braddock’s estimate of the value of work that Company B had performed prior to Company A’s formation, which Braddock believed were of value to Company A’s business. Characterizing the value of such work as “earnings” and “working capital” was misleading because it gave investors inaccurate information; specifically, that Company A had more liquid capital to operate its business than was the case. Therefore, Braddock violated F1NRA Rule 2010.
FINRA Rule 2010 requires that FINRA member firms and their associated persons observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. Making a negligent misrepresentation or omission of material fact to customers violates FINRA Rule 2010.
You can read more about private placements here.
John Braddock (CRD#: 1282733)
Braddock has 24 years of experience in the securities industry and was registered as a broker with Lakeridge Capital Inc. in Salida, CO between August 2012 and December 2019.
Prior to Lakeridge Capital Inc., he was registered with Pin Financial LLC in New York, NY and Indianapolis, IN between December 2007 and May 2012. FINRA expelled the firm from the securities industry in June 2016.
Braddock’s CRD also shows a bankruptcy filing on June 2017.
Braddock is not currently registered or associated with any FINRA member firm. However, he remains subject to FINRA’s jurisdiction.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with John Braddock, or Lakeridge Capital Inc., contact FINRA arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.