According to FINRA, O'Neil Securities Incorporated was censured and fined $30,000 for failing to properly record on its books and supervise two private securities transactions, and for failing to timely update Forms U4 to disclose outside business activities.

A firm representative submitted requests to participate in two private offerings involving real property investments, which the firm approved. The representative solicited 12 individuals for the first offering, raising $800,000, and 13 individuals for the second offering, raising $1,300,000. The representative received compensation for these activities.

Despite approving the transactions, the firm failed to record them on its books and records or reasonably supervise them. The firm did not document its approval of the first transaction until 14 months after approval, and did not document its analysis of the second transaction until two months after it had closed. Additionally, the firm's written supervisory procedures did not require principals to review materials relating to private securities transactions, including offering memoranda, investor questionnaires, and subscription agreements.

The firm also failed to timely update the Forms U4 of three registered representatives to disclose non-securities related outside business activities that did not involve firm customers. The representatives timely disclosed their activities to the firm upon hiring, but the firm did not update their Forms U4 until after FINRA identified the deficiencies during an examination. The firm's procedures failed to identify the individual responsible for updating Forms U4 with outside business activity disclosures.

This case demonstrates the importance of proper recordkeeping and supervision of private securities transactions, as well as timely regulatory disclosures. Investors participating in private offerings through registered representatives should verify the transactions are properly documented and approved by the firm.