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Justine Zhou: Littleton Broker Sanctioned Over Private Transactions
Justine Zhou (CRD# 2825595), a broker previously registered with The Leaders Group, was barred by the Financial Industry Regulatory Authority in connection to allegations she engaged in undisclosed and unauthorized private securities transactions. She was formerly based at the firm’s Littleton, Colorado branch office.
According to a Letter of Acceptance, Waiver and Consent (No. 2018059391501) dated November 2019, Justine Zhou engaged in private securities transactions between April 2017 and April 2018 without disclosing her participation to her member firm, Leaders Group, or receiving its approval to participate in the activities. The activities in question, according to FINRA, involved her individual involvement as well as her involvement through “a small real estate company” under her ownership and control, “in the sale of $9,050,000 in membership interests in private real estate funds managed by a third party and $5,000,000 in a promissory note with that third-party fund manager.” FINRA states that these interests and the note were securities, and that the sales comprised 15 transactions with 7 investors, “one of which was an entity owned by two Firm customers.” As a result of her involvement, Zhou’s company garnered compensation totaling $179,000 from the fund manager.
FINRA’s findings go on to state that in June 2018, Justine Zhou formed a private real estate fund called Zhou Fund I LLC, managed by her real estate company. She then allegedly filed with the SEC, on behalf of that fund, “a notice of exempt offering of securities… related to twelve transactions in June and July 2018,” transactions through which she and her company allegedly sold $2 million in membership interests in the fund to a total of 12 investors, three of which were customers of her member firm. FINRA states that her real estate company received a sourcing fee of $20,000 from the Zhou Fund in connection to these transactions, as well as a quarterly asset management fee in the first quarter of 2019.
As a result of the foregoing alleged conduct, Justine Zhou was barred from association with any FINRA member in any capacity.
Justine Zhou is currently not registered with any FINRA member firm. She was previously registered with The Leaders Group and Farmers Financial Solutions. She has passed three securities industry qualifying examinations and currently holds no state securities licenses. (Information current as of April 25, 2020.)