Stirlingshire Investments has agreed to pay a fine of $40,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From November 2022 through April 2024, three Stirlingshire registered representatives recommended that more than 25 retail customers purchase inverse or leveraged exchange traded funds (NT-ETFs), yet the firm failed to establish, maintain, and enforce written policies or procedures reasonably designed to achieve compliance with Rule 15l-1 of the Securities Exchange Act of 1934 (Reg BI) Care Obligation with respect to its recommendations of NT-ETFs, and to supervise such recommendations.

The firm’s written supervisory procedures (WSPs) prohibited purchases of NT-ETFs in customer accounts and instructed supervisors to cancel all NT-ETF purchases in customer accounts, however the firm did not enforce that prohibition, nor did it put in place any alerts, exception reports, or other supervisory tools or procedures to identify and review NT-ETF recommendations.

Stirlingshire did not establish a supervisory system, including WSPs, reasonably designed to achieve compliance with its obligations under Reg BI concerning the recommendation of NT-ETF transactions.

Therefore, Stirlingshire violated Exchange Act Rule 15l-1(a)(1) and violated FINRA Rules 3110 and 2010.

From June 2022 through December 2023, a registered representative of Stirlingshire sold to 21 investors two private placement offerings of unregistered securities issued by the firm’s parent company. Potential investors were provided copies of the private placement memorandums for the offerings. Stirlingshire did not file the offering materials with FINRA’s Corporate Financing Department.

Therefore, Stirlingshire violated FINRA Rules 5122(b)(2) and 2010.

On top of the $40,000 fine, the firm has agreed to a censure and an undertaking that a member of its senior management who is a registered principal of the firm must certify in writing that the firm has

remediated the issues and implemented a supervisory system, including WSPs reasonably designed to achieve compliance with Exchange Act Rule 15l-1(a)(1) and FINRA Rules 3110 and 2010 with respect to NT-ETFs.

Stirlingshire has been a FINRA member since June 2022. The firm, which is headquartered in New York, has one branch office and approximately 26 registered representatives. Stirlingshire is a full-service brokerage firm primarily servicing retail customers.