The National Association of Securities Dealers has fined two former Pinellas County brokers and barred them from the securities industry for selling certificates in Premier Benefit Capital Trust.
Premier Benefit ended up in receivership and investors promised 12 percent returns ended up losing most of their money.
The NASD imposed sanctions on Donald R. Krueger of Seminole and Richard N. Jensen of St. Petersburg because it considered the certificates securities. Under the association's rules, brokers are not permitted to engage in securities transactions with customers apart from their employment.
The association fined Krueger $20,000 and ordered him to pay $31,841.19 he received in commissions for selling the certificate, plus restitution. Krueger said that he believed the certificates were an "exempt deposit" rather than a security and that the money he received was a finder's fee rather than a commission.
The NASD fined Jensen $10,000 and ordered him to pay $7,650 in commissions, plus restitution. Jensen consented to the sanctions.
Jensen was working for Marketing One Securities and Krueger for Investors Choice Securities. Neither broker notified his firm or received approval for selling the certificates, the association said.
The NASD said Krueger also broke its rules by failing to answer requests for information, including the names of investors.
The NASD is a self-regulatory organization. Once brokers leave the industry, they cannot be forced to comply with association sanctions.
Neither man could be reached for comment Monday.