FINRA orders Moloney Securities to pay Restitution for Unsuitable GPB Sales
According to a Letter of Acceptance Waiver and Consent on December 28, 2022, the Financial Industry Regulatory Authority (FINRA) has censured Moloney Securities Co. $60,000 and ordered the firm to pay partial restitution of $268,082.64, plus interest.
Moloney Securities Inc. (CRD # 38535) a broker dealer based in Manchester, Missouri, reportedly engages in a general securities business, including the sale of equity securities, mutual funds and private placements.
FINRA found that between May 4, 2018, and June 29, 2018, the firm allegedly negligently failed to tell 37 investors in an offering related to GPB Capital Holdings, LLC that the issuer failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements.
Last February we reported that the CEO of GPB Capital Holdings, a New York-based registered investment adviser, and two others were arrested in connection with a massive “Ponzi-like scheme” that allegedly defrauded 17,000 investors across the U.S. out of more than $1.7 billion, according to the U.S. Attorney’s Office for the Eastern District of New York.
According to FINRA, on April 27, 2018, GPB Capital sent a letter to numerous broker-dealers that sold GPB Capital offerings, including Moloney Securities, stating that GPB Capital was in the process of registering certain classes of securities issued by certain of limited partnerships, including GPB Automotive Portfolio, and GPB Holdings II, with the SEC. As part of that process, GPB Automotive Portfolio and GPB Holdings II were required to file audited financial statements. The letters further stated that the delivery of these audited financial statements would be delayed pending the completion of a forensic audit.
FINRA indicates that while Moloney Securities received the email from GPB Capital notifying it of the delays and GPB Capital’s stated intention to complete a forensic audit, the firm allegedly sold 34 limited partnership interests in GPB Automotive Portfolio and three limited partnership interests in GPB Holdings II after that announcement. The principal value of those 37 sales, which were finalized and accepted by GPB Capital between May 4, 2018, and June 29, 2018, totaled $3,230,384. Moloney Securities reportedly received a total of $268,082 in commissions from the sales, according to the letter.
The firm’s representatives allegedly failed to inform the customers that Automotive Portfolio and Holdings II had not timely filed their audited financial statements with the SEC or the reasons for the delay. The delay in filing audited financial statements was material information that should have been disclosed, acccording to the findings.
How to Recover Investment Losses involving GPB
The White Law Group has represented numerous investors who suffered financial losses involving GPB Capital. To learn more about the firm’s investigation please see:
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Tags: GPB automotive Portfolio lawsuit, GPB Capital lawsuit, GPB Holdings II, GPB Holdings II lawsuit, GPB Holdings II losses, GPB investigation, Moloney Securities Inc. complaints, Moloney Securities Inc. FINRA lawsuit, Moloney Securities Inc. investigation, Moloney Securities Inc. investor disputes, Moloney Securities Inc. lawsuit, Moloney Securities Inc. losses, securities fraud attorneys Last modified: December 29, 2022