Two broker-dealers have been fined by the Financial Industry Regulatory Authority for negligent actions involving GPB Capital, according to Investment News.
The enforcement actions were taken against Dempsey Lord Smith of Georgia and BD4RIA Inc. of Texas, who both sold GPB Capital private placement securities. GPB Capital, a New York-based alternative asset management firm, was charged last year by the Justice Department and the SEC with running what was described as a fraudulent Ponzi-like scheme.
According to FINRA, Dempsey Lord negligently omitted to tell four investors that GPB Capital had failed to make required filings with the SEC on a timely basis in 2018, in violation of .FINRA Rule 2010. In addition, certain Dempsey Lord registered representatives made unsuitable recommendations of GPB Capital securities to four investors.in violation of FINRA Rules 2111 and 2010, the authority said. Dempsey Lord was censured and ordered to pay a $70,000 fine, as well as partial restitution of $29,840 plus interest.
In a separate action, FINRA said that BD4RIA negligently omitted to tell seven investors that GPB had failed to timely make required filings with the SEC in violation of FINRA Rule 2010. BD4RIA was fined $45,000 and was ordered to pay restitution of $40,000
The allegations were detailed in letters of acceptance, waiver and consent published by FINRA. The two firms did not admit or deny the authority’s findings, but consented to the sanctions.
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