Representing financial professionals, financial institutions and investors in investment loss, employment and disclosure matters, and in regulatory investigations nationwide.

FINRA fines 2 broker-dealers for violations involving sales of GPB Capital securities

On Behalf of | Mar 31, 2022 | FINRA Compliance

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 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.

The attorneys at Lewitas Hyman provide representation for financial professionals in regulatory investigations conducted by the SEC, state regulators and other self-regulatory organizations such as FINRA and various exchanges. Failing to take these inquires seriously, or ignoring them altogether, can result in significant fines and discipline, including a complete bar from working in the industry. As such, if you receive a notice of inquiry from a regulator, you should immediately call Lewitas Hyman at (888) 655 6002 or reach out to us through our online contact form for a free consultation.