John Wade Loofbourrow, Formerly of Demopolis Capital, Facing Customer Dispute Alleging Investments in Ponzi Scheme

The claimant is seeking $800,000 in damages for Loofbourrow’s misconduct.

John Wade Loofbourrow (CRD: 312494) was registered as a broker with Demopolis Capital from 1983 until 2021. Previously, Loofbourrow was registered as a broker with First Pennco Securities from 1976 until 1980. 

Loofbourrow has five disclosures on his BrokerCheck report. 

December 2020 Financial Event 

• Status: Pending
• Type: Bankruptcy

October 2020 Customer Dispute

• Status: Pending
• Allegations: From 8/15 through 12/15 claimant made investments in a private placement of Concord Group Holdings which claimant alleges was a Ponzi scheme.
• Damage Amount Requested: $800,000.00

June 2020 Regulatory Judgment

• Status: Final
• Initiated By: FINRA
• Allegations: Without admitting or denying the findings, Loofbourrow consented to the sanctions and to the entry of findings that he failed to conduct the review of outside business activities (OBAs) required by the FINRA rule. The findings stated that two former registered representatives that Loofbourrow supervised disclosed OBAs, but Loofbourrow failed to reasonably review their OBAs. Loofbourrow was the supervisory principal responsible for reviewing and approving any OBAs the member firm’s registered representatives disclosed. The first representative disclosed that he was the founder and chief executive officer of several related entities in the investment-related business, and that as an officer of such entities, he was engaged in capital raising activities. The second representative disclosed that he was an officer of two of the same investment-related business entities that the first representative disclosed, and that as an officer of each entity, he worked to implement their strategic plans by, among other things, selling securities to accredited investors. Both representatives also disclosed that they did not receive compensation from their OBAs. Loofbourrow approved these OBAs at the time they were disclosed but failed to conduct the review that the FINRA rule requires. In particular, Loofbourrow did not consider whether the OBAs would interfere with the responsibilities of the representatives at the firm or whether customers could view the OBAs as part of the firm’s business. Loofbourrow also failed to consider whether the OBAs of the representatives were more properly characterized as outside securities transactions. Finally, Loofbourrow did not keep a record of the factors he considered in approving the OBAs.
• Resolution: Acceptance, Waiver & Consent (AWC)
• Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
• Amount: 7,500.00
• Sanctions: Suspension
• Registration Capacities Affected: Principal Capacities – Any principal capacity, with the exception of any activities requiring registration as a FINOP.
• Duration: Two months
• Start Date: 7/6/2020
• End Date: 9/5/2020
• Regulator Statement: Fines paid in full on June 22, 2020.

August 2005 Regulatory Judgment

• Status: Final
• Initiated By: NASD
• Allegations: NASD Conduct Rule 2110; Loofbourrow, acting on behalf of his member firm, while conducting a securities business failed to maintain a minimum net capital requirement. 
• Resolution: Acceptance, Waiver & Consent (AWC)
• Sanctions: Monetary/Fine
• Amount: 7,500.00
• Sanctions: Censure
• Sanction Details: Without admitting or denying the allegations, Loofbourrow consented to the described sanctions and to the entry of findings; therefore, he is censured and fined $7,500 jointly and severally.
• Broker Comment: No customer funds were ever in jeopardy. 

December 1993 Regulatory Judgment

• Status: Final
• Initiated By: National Association of Securities Dealers, Inc. 
• Resolution: Consent 
• Sanctions: Monetary/Fine
• Amount: $2,500.00
• Sanctions: Censure
• Broker Comment: The firm has altered its accounting procedures to show placement fees as non-allowable assets. The former practice dates back to the early 1980s when the firm was a SECO member and the previous practice was allowed. No customer funds were ever in jeopardy. 

Contact Us Today

The Sonn Law Group is currently investigating allegations surrounding John Wade Loofbourrow. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.