NYSE Regulation Inc. today announced that it has censured and fined J.J.B. Hilliard, W.L. Lyons, Inc. US$1 million in connection with the sale of unregistered securities through a private placement that did not qualify for exemption under the federal securities laws.

The firm was also cited for using offering documents that contained material misrepresentations and/or omissions of facts, unsuitable sales to public investors, and supervisory, record-keeping and other violations.

NYSE Regulation also required Hilliard Lyons to make restitution to customers and to enter an undertaking to notify the NYSE of its supervisory systems and controls (that includes a CEO certification) in the event the firm re-enters the private placement business.

“When soliciting the public’s hard-earned dollars for private placements, firms must provide complete and accurate disclosure of the inherent risks,” said Susan Merrill, chief of enforcement, NYSE Regulation. “Harmed investors should be made whole when unregistered securities are sold to the public in violation of federal securities laws and NYSE Rules.”

Hilliard Lyons shall make restitution in an amount not to exceed US$3,575,108, the NYSER said. The firm may subtract any litigation settlements, provided that each customer receives reimbursement equal to the total amount invested in the private placement offerings.

The firm also agreed to provide notice to the Division of Enforcement prior to re-entering the private placement business, including a statement at that time outlining all systems, controls, and policies and procedures to be employed for compliance with the federal securities laws and NYSE Rules, and a certification signed by firm’s CEO that the firm has implemented those measures.

In settling these charges the firm neither admitted nor denied guilt.