If you have suffered losses investing in Back9 Network, Inc. through Halpern Capital, Inc., Triangle Capital, LLC, or Rainmaker Securities, LLC,  you may be able to recover your investment losses through FINRA arbitration.

According to recent news reports, Back9 Network, Inc. - a Hartford, Connecticut based golf lifestyle channel - has suspended its operations indefinitely after allegedly running out of operating capital. This announcement comes within five months of officially launching its channel on DirectTV.

Upon information and belief, Back9 Network has raised approximately $40 million from 150 investors since 2010, including $5 million in grants and loans from the state of Connecticut. Some of these funds were raised through private placement securities offerings which were exempt from registration under Regulation D. According to the Form D filings Back9 Network made with the SEC, some of this money is believed to have been raised by various securities broker-dealers, including Halpern Capital, Inc. (securities offered through Kidron Capital Advisors, LLC), Triangle Capital, LLC (securities offered through Burch & Company), and/or Rainmaker Securities, LLC.

Securities Broker-Dealers Have to Ensure that Private Placements Are Suitable for Investors

Securities broker-dealers have a regulatory duty to ensure that any investments they recommend to customers are suitable for them. This is especially important for private placement securities offerings, such as those securities issued by the Back9 Network. In the context of a Regulation D offering, FINRA Rule 2111 (NASD Rule 2310) requires that securities broker-dealers to conduct a suitability analysis when recommending securities to both accredited and nonaccredited investors that will take into account the investors’ knowledge and experience. The brokerage firm must make reasonable efforts to gather and analyze information about the customer’s other holdings, financial situation and needs, tax status, investment objectives and such other information that would enable the firm to make its suitability determination.

In addition to ensuring that securities are suitable for its customers on an individual level, FINRA Rule 2111 (NASD Rule 2310) also states that a securities must have reasonable grounds to believe that a recommendation to purchase, sell or exchange a security is suitable for the customer. This "reasonable-basis" suitability requirement means that in the context of a Regulation D private placement securities offering, brokerage firms have a duty to conduct due diligence on:

• The issuer and its management;
• The business prospects of the issuer;
• The assets held by or to be acquired by the issuer;
• The claims being made; and
• The intended use of proceeds of the offering.

A securities broker-dealer hat lacks essential information about an issuer or its securities when it makes a recommendation, including recommendations of securities in Regulation D offerings, must disclose this fact as well as the risks that arise from its lack of information. In addition, a brokerage firm “may not rely blindly upon the issuer for information concerning a company,” nor may it rely on the information provided by the issuer and its counsel in lieu of conducting its own reasonable investigation.

Back9 Network Investors May Have Investment Loss Recovery Options through FINRA Arbitration

Fortunately for investors, they may be able to recover their investment losses through FINRA arbitration or securities litigation if the investments in Back9 Network were purchased from a brokerage firm and were unsuitable for them. If you are an investor that has purchased investments in Back9 Network, Inc. from a stockbroker or investment banker registered with Halpern Capital, Inc., Triangle Capital, LLC (securities offered through Burch & Company), and/or Rainmaker Securities, LLC , you may be able to recover your losses through FINRA arbitration or securities litigation. Please call Kons Law Firm at at (860) 920-5181 or toll free at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.

With offices in Chicago, Illinois, Kons Law Firm represents investors nationwide in securities arbitration and litigation matters. To learn more about the Firm’s securities litigation and FINRA arbitration practice, please visit www.investmentfraudattorneys.com.