On October 6, 2026, the Financial Industry Regulatory Authority (FINRA) announced that it had censured and fined Revere Securities LLC $800,000.00 for anti-money laundering (AML) and supervisory violations related to small-cap initial public offerings (IPOs) for predominantly foreign-based issuers. As part of the settlement, FINRA required the firm to retain a third-party consultant to review its compliance with FINRA rules, obtain a report containing recommendations to remediate its supervisory procedures and systems, and implement those recommendations. Revere consented to the findings without admitting or denying the charges.

FINRA found that since 2022 Revere’s core business included serving as a lead underwriter or selling group member in approximately 60 small-cap IPOs, more than 40 of which involved issuers that operated in Hong Kong or China. Some of these offerings bore hallmarks of potential “ramp-and-dump” schemes. In certain cases, the issuers’ stock prices experienced significant, unusual increases immediately after the IPO before rapidly collapsing, resulting in millions of dollars in secondary market losses. Trading in Revere accounts reflected multiple indications of potential manipulation, including coordinated trading and activity that represented a significant portion of daily volume.

Revere’s customers for these offerings included individuals from foreign jurisdictions. Despite this, the firm lacked adequate procedures to verify customers’ true identities. Multiple sets of seemingly unrelated customers opened new accounts on the same dates, reported living at the same residential addresses, and then engaged in identical or substantially similar trading patterns in the same issuers. In one instance, Revere allocated more than $1.5 million worth of IPO shares—nearly its entire allotment—to just eight customers referred by a foreign broker-dealer. Four of those account holders claimed to be unemployed yet reported annual income exceeding $200,000.00, and seven of the eight applications contained contradictory information about the source of deposited funds. Revere opened all eight accounts without adequately verifying the information. On the IPO date, the stock surged 318 percent before collapsing more than 50 percent by the close. All eight customers directed liquidation of their shares the same day from IP addresses traceable to countries other than those where the customers purportedly resided. Revere did not identify these factors as potentially suspicious.

Bill St. Louis, FINRA’s Executive Vice President and Head of Enforcement, stated that ramp-and-dump schemes constitute a direct threat to investors and market integrity, and that broker-dealers underwriting or distributing such offerings “are on the front lines of defense.” He emphasized that firms building core underwriting businesses around IPOs of this type must implement robust, risk-tailored compliance controls and take seriously their obligation to detect and investigate suspicious activity.

The matter underscores FINRA’s heightened focus on risks associated with small-cap issuers, particularly those with operations in foreign jurisdictions. In October 2025, FINRA announced a review of firm practices regarding public and private offerings of small-cap exchange-listed issuers with business operations in places such as China; that sweep remains ongoing. Prior to the letter of acceptance, waiver, and consent, Revere had already engaged a third-party consultant to review its AML program. The settlement highlights the importance of customer identification, due diligence, and surveillance systems that are reasonably designed to detect red flags specific to a firm’s business model, including concentrated allocations, coordinated trading, and post-IPO price anomalies.