FINRA Fines National Securities $9 Million Over GPB and Other Misconduct

Posted on July 6th, 2022 at 11:34 AM
FINRA Fines National Securities $9 Million Over GPB and Other Misconduct

From the Desk of Jim Eccleston:

The Financial Industry Regulatory Authority (FINRA) has fined National Securities over a host of issues, including artificially influencing the market for securities it had underwritten and negligently omitting to inform GPB Capital private placement investors that the company had failed to timely file its audited financial statements. 

National Securities acted as an underwriter for three initial public offering and seven follow-on offerings between June 2016 and December 2018, according to FINRA. FINRA alleges that National Securities violated industry rules by improperly convincing several clients to purchase stock in the aftermarket of the offerings prior to their completion. According to FINRA, industry rules prevent underwriters from attempting to convince any individual to purchase an offered security during a restricted period. “National Securities Corp.’s conduct was aimed at artificially stimulating demand and supporting the price of the offered securities, which tended to be thinly traded, in the immediate aftermarket”, according to FINRA. 

National Securities has been ordered to pay disgorgement of $4.8 million in net profits it generated for underwriting the 10 public offerings as well as $625,000 in restitution for failing to disclose material information to GPB Capital private placement investors. FINRA also has ordered the firm to pay an additional $3.6 million fine for the misconduct as well as various other supervisory violations. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 

Tags: eccleston, eccleston law, finra, fines

Return to Archive

TESTIMONIALS

Previous
Next

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

May 9, 2025
FINRA Suspends Former Wells Fargo Advisor Over Unauthorized Transfer in Elderly Client's Account

FINRA has fined and suspended former Wells Fargo financial advisor Jarrett Thomas after he executed a $50,000 transaction for an elderly client despite being informed that she was no longer capable of managing her finances.

May 8, 2025
All 50 States Now Aligned on Annuity Sales Standards

The annuity industry officially has secured uniformity in sales regulations across all 50 states.

May 7, 2025
Jury Finds Investment Advisor Liable for Failing to Disclose Annuity Commissions

A federal jury in Massachusetts has found investment adviser Jeffrey Cutter and his firm, Cutter Financial Group, liable for violating federal securities law by failing to disclose significant upfront commissions and conflicts of interest related to an annuity replacement scheme.