Network 1 Financial Securities, Inc.

FINRA has censured and fined Network 1 Financial Securities, Inc. (CRD #13577) $50,000 for supervisory failures and the distribution of misleading materials related to a private placement offering between October 2021 and July 2022.

Headquartered in Red Bank, New Jersey, Network 1 agreed to act as placement agent for a company seeking to launch a blockchain-based platform for trading fractional shares of fine art. The firm began promoting the offering in April 2022 by distributing marketing materials that included inaccurate statements—such as a false claim that the investment was “contractually collateralized by debt-free blue-chip artwork.” These communications also exaggerated the issuer’s business potential and omitted key risk disclosures.

Despite concerns raised by Network 1’s own investment banking team during due diligence, one of the firm’s representatives sent the flawed materials to over a dozen potential investors. Ultimately, Network 1 withdrew from the deal in June 2022, citing concerns with one of the issuer’s assets.

FINRA found that Network 1 failed to supervise the representative’s activity in violation of Rules 3110 and 2010, and distributed misleading communications in violation of Rules 2210 and 2010. In addition to the censure and fine, the firm must certify within 60 days that it has corrected the supervisory weaknesses identified in the AWC.

If you were solicited for or invested in this offering through Network 1 and believe you may have suffered losses, contact ChapmanAlbin to review your recovery options.

Call 1-877-410-8172 or visit chapmanalbin.com to schedule a free consultation.