Rainmaker Securities Investigation

September 16, 2015

Salas Wang LLC is launching an investigation into Rainmaker Securities LLC.  According to a recent disciplinary action by the Financial Industry Regulatory Authority (FINRA), Rainmaker Securities:

During the 2011 Period, Rainmaker marketed and sold the following unregistered private placement securities offerings: (a) Buttonwood Social Network Fund LLC (the Facebook Fund); (b) Eudora Global LLC (Eudora Global); (c) The Incubation Factory Technology Fund, LLC (TIF Fund”); and (d) The Idea Fund LLC (“IDEA Fund”) (the 2011 Offerings). In connection with the marketing and sale ofthe 2011 Offerings, the Firm’s WSPs required Rainmaker and Anderson to ‘perform adequate due diligence,” including obtaining “sufficient information regarding…the issuer in order to be able to make any needed suitability determinations.” The Firm’s WSPs further provided Minimum Due Diligence Guidelines ‘ that. among other things. required the Firm to: (i) question or assess the reasonableness of any assumptions underlying the issuer’s projections; (ii) reviewthe issuer’s material agreements (e.g., bank loans, major credit agreements, intellectual property licenses); (iii) inquire about the existence and status of any litigation involving the issuer; and (iv) review any public filings regarding the issuer. In addition, the WSPs provided that prior to engaging in any private placement transaction, the Firm must complete a “Private Placement Compliance Checklist,” in the form attached to the WSPs. Finally, the Firm’s WSPs also provided that Anderson was the individual responsible for ensuring that adequate due diligence was performed for each ofthe 2011 Offerings. With respect to each ofthe 2011 Offerings, Rainmaker, acting by and through Anderson4 failed to enforce the above-referenced WSPs in that the Firm failed to evidence that adequate due diligence was conducted. In addition, with respect to three of the 2011 Offerings (the Facebook Fund, TIF Fund, and IDEA Fund), Respondents failed to complete and maintain a Private Placement Compliance Checklist” required by the Firm’s WSPs as evidence of its due diligence. As a result of the above, Respondents violated NASD Rule 3010(b) and FINRA Rule 2010.

If you are an investor that lost money investing with Rainmaker securities or in these products, you may be able to recover your losses through FINRA arbitration or securities litigation.  You can contact Jeff Salas at 312.803.4963 or through the contact form below.

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