FINRA Continues To Target Sellers Of Private Placements
The Financial Industry Regulatory Authority (FINRA) announced that it has imposed sanctions on two firms and seven individuals for selling interests in private placement offerings without conducting a reasonable investigation. The private placement offerings were issued by Medical Capital Holdings and Provident Royalties, both of which ultimately failed causing massive losses for investors.
The following firms and individuals were sanctioned:
- Workman Securities, of MN, was ordered to pay $700,000 in restitution to customers and its former President, Robert Vollbrecht, was fined $10,000 and barred in any principal capacity.
- Timothy Cullum, former Chief Executive Officer, and Steven Burks, former President, of Cullum & Burks Securities, Inc., of Dallas, Texas, now a defunct firm, were each fined $10,000 and suspended in any principal capacity for six months.
- Jeffrey Lindsey and Bradley Wells, two former executives of Capital Financial Services, Inc., of ND, were each suspended for six months in any principal capacity and fined $10,000.
- Jay Lynn Thacker, former Chief Compliance Officer of Meadowbrook Securities, LLC, formerly Investlinc Securities, LLC, out of Mississippi was suspended for six months in any principal capacity in any principal capacity and fined $10,000.
- David William Dube, former Owner, President, Compliance Officer and Anti- Money Laundering (AML) Compliance Officer of the now defunct Peak Securities Corporation of Florida, was barred for failing to conduct adequate due diligence, as well as failure to detect, investigate and report numerous suspicious transactions in 10 customer accounts where red flags existed.
- Askar Corporation out of MN was fined $45,000 for failing to conduct adequate due diligence on a private placement from DBSI, Inc., another company that went bankrupt.
FINRA’s investigation determined that the firms and the individuals who marketed and sold MedCap, provident and DBSI private placement offerings did not have reasonable grounds to believe the private placements were suitable for any of their customers and they failed to investigate them.
If you have suffered losses in private placement offerings, please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.