Investor Advocates Investigate Former Broker John Krohn Following Several Recent Customer Disputes and Media Coverage

Ex-Broker John Michael Krohn, previously registered with Principal Securities, Inc in West Des Moines Iowa, is being investigated by investor advocates following recent customer complaints at the time of this writing. As found in his Financial Industry Regulatory Authority (FINRA) Brokercheck Report, three of his customer disputes are pending and two appear as ‘denied.’ Also reported on Krohn’s BrokerCheck report is a regulatory action by FINRA , as to which Krohn has reportedly agreed to an “Acceptance, Waiver, and Consentâ€, alongside a fine, without admitting or denying the regulators’ findings.

Records reviewed by investor rights lawyers Alan Rosca and his colleagues at the Rosca Scarlato law firm indicate that the FINRA regulatory allegation found that Krohn had been engaged in outside business activities, and made personal purchases of private securities totaling $7.9 million away from his member firm without prior written notice. It also highlighted potential issues surrounding Krohn’s motives, as these transactions were allegedly outside the scope of his employment with the firm and he failed to notify the firm about his role in these transactions. Krohn also allegedly failed to inform the firm about whether he had received or was expecting to receive selling compensation from these sales, which he had made partly through an investing company that he jointly owned with a customer. These findings by FINRA resulted in a three-month suspension from FINRA and a Civil and Administrative Penalty or fine of $10,000.00.

John Krohn Associated with Spotlight Innovation

According to media reports and investigation by securities attorney Alan Rosca and his colleagues, the outside business at issue was Spotlight Innovation, a publicly-traded company and a penny stock based in Iowa and ostensibly engaged in the pharmaceutical / biotechnology business. Spotlight trades on the “pink slips†in the OTC market, with a warning that it has “Delinquent SEC Reporting†and that “This company may not be making material information publicly available.†The company has recently traded for approximately a penny per share, on very low volume.

In relation to his pending accusations, Krohn and his former brokerage firm Principal Securities, Inc have been accused by customers of allegedly soliciting investments into companies associated with Krohn, failure to supervise private security transactions and selling-away activities.

Krohn’s FINRA Brokercheck report also displays two denied allegations as involving activities that involve investments into private placements while associated with Principal Securities, Inc and another accusation from a former customer relating to variable annuity. The reporting source for his alleged private placements comes from the firm Principal Securities, Inc, with alleged damages totaling $97,000.00. The source for the second denied activity was broker, representing a former customer, seeking damages worth $5,696.00.

Investors who believe they may have lost money invested with John Krohn in Spotlight Innovation or other businesses, or have any questions or information relevant to this investigation are urged to contact Rosca Scarlato LLC investor rights attorneys Alan Rosca or Paul Scarlato for a free, no-obligation discussion regarding their options.

Pending customer disputes and complaints on John Krohn’s FINRA report

In February 2019, one of Krohn’s customers filed a complaint against Krohn for soliciting large investments into other companies that he in part owned, controlled, or managed. The FINRA Brokercheck report shows that damage amount requested is $28,000,000.00, plus punitive damages and interest.

During February 2020, another of Krohn’s customers filed a complaint against his broker-dealer firm Principal Securities, Inc, for allegedly failing to supervise his private security transactions. These transactions are alleged to include selling-away activities and outside business activities. Krohn’s FINRA Brokercheck Report shows that the damage amount requested in relation to these actions stands at $1,200,000.00, plus interest, attorneys fees, expert fee’s, forum fee’s and punitive damages.

In addition to the complaints above, in March 2020, one of Krohn’s former customers filed a complaint against Principal Securities, Inc, in relation to Mr. Krohn’s alleged misconduct, which resulted in an alleged loss of investment for the claimant. John Krohn’s FINRA Reports displays specific allegations related to private security transactions and dealings with claimants, of which the firm failed to supervise satisfactorily. The alleged damages are estimated at $10,000,000.00.

Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints and actions mentioned in this article, unless otherwise indicated.

Have you invested money with John Krohn? Investor Advocates Investigating 

Investor advocates at Rosca Scarlato LLC are currently investigating the activities surrounding Krohn’s alleged customer complaints. Rosca Scarlato frequently represent investors who have lost money due to stockbroker misconduct, unsuitable investment recommendations or material misrepresentations or omissions. Security attorney, Alan Rosca, has helped thousands of victimized investors across the country and across the globe in areas from class action suits to arbitrations.

Any investors who are concerned that they may have lost money or those who wish to inquire about their potential loss recovery options are encouraged to contact attorney Alan Rosca or his colleagues for a free, no obligation discussion about their options. Investors who may have useful information pertaining to Krohn’s activities are also advised to contact Alan Rosca at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.