In the wake of the recent downfall of a number of
private placement investments, the Financial Industry Regulatory Authority (FINRA) has now
expelled its first broker-dealer from the securities industry over its
involvement in such offerings.
Recently, FINRA expelled broker-dealer Provident Asset Management LLC from
the industry. Provident Asset Management was at the heart of marketing
a series of fraudulent private placements through its affiliate, Provident
Those who purchased interests in Provident Royalties were supposedly investing
in the oil and gas business. Provident Royalties was exposed in mid-2009
as a massive $485 million
FINRA said that Provident Asset Management's expulsion was part of
its broader investigation into potential abusive sales tactics by independent
broker-dealers who sold such private placements.
Provident Asset Management consented to FINRA's findings, neither admitting
nor denying the charges.