Sale Of Private Placements Claims Another Independent B-D

After some twenty (20) independent broker dealers have been forced to close because of claims from selling fraudulent private placement offerings, Workman Securities joins the list according to Investment News. The firm has notified its employees during a company compliance gathering that it will cease to do business in November 2011.

Interestingly, Workman has recommended that its staff of representatives go with rival Allied Beacon Partners. Typically, all of the brokers from a closing firm are snapped up by rival firms who have watched the inevitable occur. The move of an entire staff to another firm would be more like a takeover or a merger. At any rate, brokers were guaranteed an easy switch if they went to Allied Beacon, while maintaining their same broker payout for two (2) years.

Since 2010, there have been some twenty (20) independents forced to shutter their doors due to their involvement with fraudulent private placement offerings by Provident Royalties LLC and Medical Capital Holdings Incorporated, both of whom went bankrupt. Workman Securities was a big peddler of Provident Royalties private placements, ranking in the top ten with sales of $9 million. Now the firm faces twenty (20) pending cases related to claims for losses from the Provident investments. At the beginning of 2011, the firm agreed to pay $700,000 in a deal with the Financial Industry Regulatory Authority (FINRA) as partial payment to a group of investors who lost money in private placement offerings by Provident Royalties and Medical Capital.

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