FINRA Continues Enforcement Actions Against Brokerages in GPB Capital Scandal
Four advisor groups have agreed to pay nearly $1.3 million in fines and restitution after an investigation by the Financial Industry Regulatory Authority (FINRA) found that they had made material omissions. It is the latest in a series of enforcement actions against brokerages that recommended and sold private placements from GPB Capital Holdings.
At Meyer Wilson, we represent investors who have suffered substantial financial losses due to security fraud or broker misconduct. We have helped thousands of clients and recovered over $350 million in verdicts and settlements nationwide. If you sustained losses after being recommended or sold GPB Capital Holdings private placements, contact our office at (614) 532-4576 for a free consultation.
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Brokerages Required to Pay Fines and Restitution
According to a Letter of Acceptance, Waiver, and Consent issued by the Financial Industry Regulatory Authority, four brokerages have agreed to a nearly $1.3 million fine after making material omissions related to GPB Capital offerings.
Four advisor groups accused of regulatory violations related to GPB Holdings recommendations:
- FSC Securities Corporation – Required to pay a $50,000 fine and make partial restitution of $277,612.30 plus interest.
- Royal Alliance Associates, Inc. – Required to pay a $35,000 fine and make partial restitution of $171,500 plus interest.
- SagePoint Financial, Inc. – Required to pay a $60,000 fine and make partial restitution of $325,475.66 plus interest.
- Woodbury Financial Services, Inc. – Required to pay a $55,000 fine and partial restitution of $300,224.98 plus interest.
In addition to the fines and restitution, each brokerage agreed to a censure. The FINRA release indicates that despite receiving information that GPB Capital-related investments’ required financial filings would be delayed, the brokerages continued to recommend and sell the placements. FINRA further alleges that the advisor groups failed to tell investors about the delayed financial filings and other material information.
Concerns for Other Brokerages
It is not the first time that a brokerage has been ordered to pay fines and restitution related to their recommendation and sale of GPB Capital Holdings. In March 2022, Geneos Wealth Management became the first to settle a regulatory claim. Smaller brokerage firms agreed to similar Letters of Acceptance, Waiver, and Consent only a few days later.
At the time, attorney Courtney Werning, a principal attorney with Meyer Wilson was quoted in Financial Planning as saying “It would be foolish for firms to assume they’re not going to get hit with a FINRA action relating to their GPB sales. This is the first of what I expect to be many.” Her prediction could not have been more accurate as additional brokerages join the fray and settle FINRA cases related to GPB Holdings products.
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If you invested in GPB Capital Holdings’ private placements and sustained losses, you might be entitled to compensation through FINRA arbitration or another legal action. Contact our office at (614) 532-4576 for a free, no-obligation consultation. There are no fees unless we win.
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