FINRA Fines Oak Hills Securities $125,000 for Private Placement Violations

Oak Hills Securities, Inc. has agreed to pay a $125,000 fine and accept a censure from the Financial Industry Regulatory Authority (FINRA) following multiple compliance violations related to private placement offerings.

Violations Spanning 2019–2024

According to FINRA, from September 2019 to June 2024, Oak Hills acted as the exclusive placement agent in seven private placements sold on a best-efforts and all-or-none or part-or-none basis. During these offerings, the firm failed to terminate sales and return investor funds when the minimum contingency amounts had been reduced, a willful violation of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-9, as well as FINRA Rule 2010.

Additionally, between September 2019 and December 2020, Oak Hills violated Exchange Act §15(c)(2) and SEC Rule 15c2-4 by failing to properly escrow investor funds in six private placements. FINRA also determined that, in two separate offerings from November 2019 to February 2021, the firm did not timely file required offering documents, breaching FINRA Rules 5123 and 2010.

Regulatory Consequences

The settlement requires Oak Hills not only to pay the $125,000 penalty but also to accept a formal censure. The disciplinary action underscores FINRAs continued focus on compliance with securities laws governing contingency offerings and investor fund protections.

Background on Oak Hills

Oak Hills Securities has been a FINRA member since 2008. Based in Oklahoma City, Oklahoma, the firm operates with six registered representatives and maintains one branch office. Its business primarily focuses on private placements and investment banking, with an emphasis on Oklahoma tax credit direct participation investment programs.

This case highlights FINRAs enforcement efforts in ensuring firms adhere to rules designed to protect investors in private placement transactions, particularly where contingency terms and escrow arrangements are involved.