According to FINRA, Newbridge Securities Corporation and its managing director Bruce Howard Jordan were sanctioned for failing to comply with escrow requirements and improperly handling contingency offerings, resulting in willful violations of Rule 10b-9 of the Securities Exchange Act.

The firm was fined $30,000 and Jordan received a $5,000 fine plus a one-month suspension from principal capacities. The violations involved the firm acting as placement agent for contingency offerings where investor funds must be held in escrow until minimum investment thresholds are met. Instead of using a bank as required by their own procedures, the firm used a law firm as escrow agent and failed to use their standard escrow agreement. Jordan, who was specifically assigned responsibility for these offerings, failed to enforce the firm's written procedures.

In one particularly troubling instance, the firm improperly counted a non-bona fide investment toward the minimum contingency calculation and released funds from escrow. Without this questionable investment, the offering minimum would not have been met. The firm's procedures provided no guidance on what constituted a bona fide investment, and Jordan failed to investigate before declaring the offering sold and releasing investor funds.

In a second offering, when the minimum contingency was not met by the deadline, the firm extended the closing date without sending written reconfirmation offers to existing investors beforehand. Instead, investors received only a supplement telling them to contact the firm if they wished to opt out. No investors confirmed their continued participation in writing, yet the firm released all funds to the issuer after the extended deadline.

These violations demonstrate why escrow and contingency requirements exist—to protect investors from having their money tied up in offerings that fail to meet minimum thresholds. Investors participating in contingency offerings should verify that their funds are held in proper escrow at a bank, confirm the offering terms including deadlines and minimums, and ensure they receive proper written notice of any material changes. Firms and their principals cannot take shortcuts with these investor protection rules, even when issuers pressure them to close deals.