FINRA Expels Broker-Dealer Over Private Placements
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 Royalties LLC.
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 Ponzi scheme.
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.