meta_id 3567781

On October 6, 2026, the Financial Industry Regulatory Authority (FINRA) fined Revere Securities LLC $800,000 for anti-money laundering (AML) and supervisory violations related to small-cap initial public offerings (IPOs) for foreign-based issuers. FINRA found that Revere acted as a lead underwriter or selling group member for foreign-based, small-cap IPOs that exhibited hallmarks of potential "ramp-and-dump" schemes, failed to detect and report potentially suspicious transactions related to those issuers, and did not maintain a reasonable customer identification or due diligence program. Since 2022, Revere's core business involved serving as a lead underwriter or selling group member in IPOs for predominantly foreign-based small-cap issuers, more than 40 of which involved issuers operating in Hong Kong or China. In several offerings, issuers' stock prices experienced significant, unusual increases immediately after the IPO before rapidly collapsing, resulting in millions of dollars in secondary market losses. FINRA identified multiple red flags, including coordinated trading patterns, trading a significant portion of daily volume, and inadequate customer verification procedures. In one instance, Revere allocated more than $1.5 million worth of IPO shares to eight customers referred by a foreign broker-dealer. Four account holders claimed unemployment yet reported income exceeding $200,000 annually, and seven applications contained contradictory information about fund sources. On IPO day, the stock surged 318% before collapsing more than 50% by market close. All eight customers sent liquidation emails on the same day from IP addresses traceable to countries other than where they purportedly lived, yet Revere identified none of these factors as suspicious. As part of the settlement, FINRA required Revere to retain a third-party consultant to review compliance with FINRA rules, obtain recommendations for remediating supervisory procedures and systems, and implement those recommendations. Revere consented to FINRA's findings without admitting or denying charges. This action reflects FINRA's heightened focus on risks involving small-cap issuers, following a review announced in October 2025 examining firm practices regarding public and private offerings of small-cap exchange-listed issuers with business operations in foreign jurisdictions.