Securities Network closes its doors.

According to the Investment News, another small broker-dealer that sold high-risk private placements is out of business.

Securities Network LLC of Norcross, Ga., at the end of March informed the Financial Industry Regulatory Authority Inc. to terminate its broker-dealer license.

The firm was not a big seller of Provident Royalties LLC preferred stock, according to court filings. Securities Network sold $215,000 of Provident preferred stock, according to bankruptcy court filings in federal court in Dallas.

Other firms sold tens of millions of dollars of the product. In total, dozens of independent broker-dealers sold about $485 million of Provident shares.

According to Finra’s BrokerCheck system, Securities Network had no history of regulatory fines.

When reached, an official at the firm, who declined to give her name, said the firm declined to comment about the matter.

The list of broker-dealers that sold Provident — or another series of failed private placements from Medical Capital Holdings LLC — and subsequently shut down is considerable. It includes: GunnAllen Financial Inc., QA3 Financial Corp. and Jesup & Lamont Securities Corp. (See the list of 50 broker-dealers that sold Provident.)

The Securities and Exchange Commission charged both Provident Royalties and Medical Capital in 2009 with fraud, and securities regulators followed with investigations into how broker-dealers sold the products.

Mounting legal bills due to lawsuits from investors seeking their money back have crushed certain broker-dealers that sold the private placements.

In this case, Securities Network had shrunk considerably over the past few years. The B-D had $261,260 in revenue last year, according to its filings with the SEC, and a net loss of almost $18,000. In 2007, the firm reported an $180,000 net profit on $2.6 million in total revenue.

The firm was involved in litigation “incurred in the normal course of business related to sale of an investment that is alleged to have been a Ponzi scheme,” it said in its annual Focus report, which it filed with the SEC in February.

Both Provident and Medical Capital have been described as alleged Ponzi schemes.

If you have questions about your investments, the securities attorneys of The White Law Group may be able to help.  To speak with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.