Paulson Investment Company

Kurta Law is investigating recommendations by brokers from Paulson Investment Company, LLC (CRD#: 5670). The firm is a registered broker-dealer headquartered in Portland, Oregon.

Paulson Investment Company, LLC also operates as Paulson Wealth Advisors and Paulson Investment Company, Inc.

Fees and Conflicts of Interest

Paulson Investment Company discloses how it makes money and its conflicts of interest in its Customer Relationship Summary (Form CRS), including the following:

• Investors pay transaction-based fees that may be charged as commissions, markups/markdowns to the price of the investment, and sales charges. This fee may also be charged as a spread, the difference between the buy and sell price of the investment.
• Brokers have an incentive to recommend investments that charge higher commissions.
• When the firm transacts in a principal capacity, it is in a position to manipulate prices.
• Paulson Investment Company receives cash fees from issuers of certain investments when it acts as a placement agent. These issuers generally also provide equity securities to the firm. In some cases, the firm may also recommend securities that it previously acquired from the same issuer through a private placement.
• The firm has an incentive to encourage you to invest in more costly positions in mutual funds and variable insurance products.
• The firm may also make money if your broker manages your account and invests on your behalf.

Broker-Dealer Services

Paulson Investment Company offers brokerage services to retail investors and investment banking services to private and public companies. It may serve as a placement agent, underwriter, or distributor for these companies.

Investors who hold brokerage accounts with Paulson Investment Company can trade in potentially high-risk investments like mutual funds and variable insurance products.

Regulatory Actions

Investors should be aware that Paulson Investment Company has been fined by the SEC and FINRA. You can access its complete regulatory disclosure on its detailed BrokerCheck page.

SEC Fine

On November 22, 2024, the Securities and Exchange Commission filed cease-and-desist proceedings alleging that Paulson Investment Company filed suspicious activity reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network that did not contain all of the required details.

The SEC censured the firm, fined it $75,000, and ordered it to cease and desist from violations of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder. The SEC also ordered the firm to hire an independent anti-money laundering compliance consultant.

FINRA Fine

On May 20, 2024, FINRA filed a Letter of Acceptance, Waiver & Consent (AWC) alleging that Paulson Investment Company failed to file or timely file documents and information relating to seven public takedown offerings of securities.

The AWC alleged that Paulson Investment Company acted as placement agent for a biotechnology company in connection with a $100 million shelf offering of securities in March 2018, then participated in seven public takedown offerings for securities from this shelf offering in May 2018 and April 2019.

The firm allegedly also failed to establish and maintain a system of supervision reasonably designed to achieve compliance with FINRA Rule 5110’s filing and disclosure requirements.

Known as the Corporate Financing Rule, FINRA Rule 5110 requires members participating in a public offering to file documents concerning the underwriting terms and arrangements before the offering commences.

Paulson Investment Company was censured by FINRA, fined $100,000, and ordered to remediate the supervisory issues alleged in the AWC. You can read the full AWC here.

Alleged Failure to Supervise

On January 20, 2023, FINRA alleged that Paulson Investment Company failed to reasonably supervise unsuitable recommendations of variable interest rate structured products (VRSPs) by three brokers from January 2016 through May 2019.

An AWC alleged that three brokers recommended VRSPs to 42 clients with low or moderate risk tolerances, despite the significant risk involved with these investments, and recommended unsuitable concentration of at least 50% account value in VRSPs to 27 other clients.

FINRA censured the firm, fined it $150,000, and ordered it to pay restitution of $185,215.35 plus interest. You can access the full AWC here.

Alleged Unregistered Distribution of Securities

On January 31, 2020, Paulson Investment Company consented to the entry of findings that it allegedly sold six private placement offerings between May 2017 and April 2018 that constituted unregistered distribution of securities.

According to an AWC, the firm allegedly claimed these securities were exempt from registration under Rule 506 of Regulation D, but used general solicitation practices to solicit the offerings. The firm allegedly lacked a substantive relationship with 11 solicited investors.

FINRA censured the firm and fined it $50,000. You can read the full AWC here.

Alleged Violation of FINRA Membership Agreement

On August 15, 2017, Paulson Investment Company consented to the entry of findings that it allegedly operated more offices between 2016 and approximately 2017 than was permitted under its Membership Agreement with FINRA.

In an AWC, FINRA alleged that Paulson Investment Company failed to register three locations as branch offices during this time.

FINRA censured the firm and fined it $50,000. You can access the full AWC here.

Brokers with Misconduct Allegations on Their Records

Kurta Law is aware of the following brokers currently or formerly associated with Paulson Investment Company who have disputes on their records. Investors who have concerns about their broker’s conduct should contact a securities attorney.

• Harold Ramsey: https://www.kurtalawfirm.com/blog/harold-ramsey/ 
• John Nole: https://www.kurtalawfirm.com/blog/john-nole/ 

Kurta Law Can Help

Investors who lost money working with a Paulson Investment Company broker or advisor should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.