Advisor Group BDs Hit With $1.3M FINRA Penalty
The Financial Industry Regulatory Authority has ordered four Advisor Group broker-dealers — FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial — to pay roughly $1.3 million in fines and restitution related to sales of private placements issued by GPB Capital Holdings.
According to FINRA, between May 2018, and June 2018, the four BDs “negligently failed to tell investors in an offering related to GPB Capital Holdings, LLC (GPB Capital) that the issuer failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements.”
By doing so, each firm violated FINRA Rule 2010, the broker-dealer self-regulator said.
Each firm consented to pay the following:
FSC Securities: a censure; a $50,000 fine; and partial restitution of $277,612.30 plus interest.
Royal Alliance: a censure; a $35,000 fine; and partial restitution of $171,500 plus interest.
SagePoint Financial: a censure; a $60,000 fine; and partial restitution of $325,475.66 plus interest.
Woodbury Financial: a censure; a $55,000 fine; and partial restitution of $300,224.98 plus interest.
From 2013 through 2018, GPB Capital launched several limited partnerships, each focused on acquiring controlling interests in certain private-sector companies, FINRA said.
The GPB Capital limited partnerships included GPB Automotive Portfolio, LP, which was formed in 2013 to acquire and operate automotive dealerships, FINRA’s order explained.
“These GPB Capital limited partnerships raised capital by selling limited partnership interests to retail investors. GPB Capital sold the limited partnership interests through, among other channels, broker-dealers. The securities GPB Capital sold, including those issued by Automotive Portfolio, were not registered,” FINRA said.
