FINRA Settles With Two Advisory Firms Over Improper Sales Of GPB Private Placements

Posted on March 29th, 2022 at 12:00 PM
FINRA Settles With Two Advisory Firms Over Improper Sales Of GPB Private Placements

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) has agreed to settlements with two advisory firms over improper sales of GPB Capital Holdings private placements to investors.


The two firms, Georgia-based Dempsey Lord Smith and Texas-based BD4RIA Inc., face regulatory scrutiny amidst GPB’s regulatory failures. Specifically, GPB failed to timely file its audited financial statements, and subsequently cut dividends for some private placements. GPB additionally was charged with fraud in 2021 by the SEC and the Justice Department.


According to FINRA, Dempsey Lord Smith violated industry rules in June 2018 when it “negligently omitted” to inform four investors in GPB private placements that the company had failed to timely file those audited financial statements. Further, FINRA alleged that certain advisors at the firms made unsuitable recommendations of GPB private placements to four clients between September 2015 and June 2018. Similarly, BD4RIA also “negligently omitted” to inform seven clients in June 2018 that GPB had failed to make the required SEC filings, according to FINRA. BD4RIA received a $45,000 fine and has been ordered by FINRA to pay $40,000 in restitution.


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

 
 

Tags: eccleston law, finra, advisory firms

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