On June 23, 2022, FINRA announced that it sanctioned National Securities Corporation around $9 million. Among the reasons for the fine include the firm’s disclosure failures regarding GPB Capital. FINRA’s fine includes disgorgement of $4.77 million in net profits the firm received for underwriting 10 public offerings. In these offering, FINRA stated that NSC attempted to artificially influence the market for the offered securities.
Between June 2016 and December 2018, NSC, while acting as an underwriter for three initial public offerings and seven follow-on offerings, unlawfully induced or attempted to induce certain customers to purchase stock in the aftermarket of the offerings prior to their completion. FINRA pointed to the following misconduct:
According to FINRA, “NSC’s conduct was aimed at artificially stimulating demand and supporting the price of the offered securities, which tended to be thinly traded, in the immediate aftermarket. The aftermarket performance of NSC’s underwritten offerings was important to the firm’s reputation and ability to generate future investment banking revenue.”
Further, FINRA ordered NSC to pay more than $625,000 in restitution for failing to disclose material information to customers who purchased GPB Capital Holdings, LLC. Between April 2018 and July 2018, NSC negligently omitted to tell investors in two offerings related to GPB Capital about delays in the issuer’s required public filings, including audited financial statements.
In settling this matter, NSC consented to the entry of FINRA’s findings without admitting or denying the charges.
KlaymanToskes is currently representing GPB Capital investors in claims against brokerage firms that unsuitably recommended the private placement to their retail customers. The GPB Capital securities under investigation include:
Current and former NSC customers who were recommended to purchase GPB Capital are encouraged to contact securities attorney Lawrence L. Klayman, Esq., at 1 (888) 997-9956.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. KlaymanToskes has recovered more than $220 million for investors in FINRA arbitrations. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.