John Krohn of Principal Securities located in West Des Moines, Iowa is accused of illegally “selling away” investments. If you have suffered losses with Mr. Krohn call 1-866-817-0201 for a free and confidential initial consultation.
Selling away is the process of selling investments to investors outside of a broker’s employment and beyond the supervision of the brokerage firm. While this may sound harmless, there is little reason for a broker to recommend such a sale absent an intent to deceive or defraud the investor.
The review of an investment by a brokerage includes a due diligence investigation to ensure that the investment is legitimate or that its financials are not falsified. Ponzi schemes often start by a broker selling “away.” The review of the broker’s brokerage also ensures that the investment is suitable for the investor and that the broker is not charging an excessive commission.
Regulators take selling away accusations seriously because of this. Regulations not only strictly forbid the practice, but they also require firms to conduct audits and investigate brokers routinely to prevent the practice from occurring.
Krohn was known as a top seller at Principal. He also ran a purported investment capital firm called Spotlight Innovations and other investing companies on the side. He generated a high volume of small investments through his firms into may small, unknown companies. The victims are largely Iowa residents.
We are aware that Principal knew that Krohn had been selling away and failed to supervise appropriately. Krohn was previously fined and suspended by regulators for engaging in selling away in 2018.
As of March 2021, there are currently three investor suits pending against Principal concerning Krohn. These claims seek damages in excess of $39 million. An SEC suit is also currently pending.