National Investment Fraud Lawyers KlaymanToskes Continues Investigation of National Securities Corporation for GPB Capital Sales
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.
National Securities Corporation to Pay $9 Million for Attempting to Artificially Influence the Aftermarket, GPB Capital Disclosure Failures
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:
- Expressly conditioning allocations on a branch manager’s or representative’s agreement to buy a specific number of shares in the aftermarket for the branch’s or representative’s customers
- Agreeing to solicit customers who received allocations to purchase additional shares in the immediate aftermarket; and
- Threatening to reduce allocations to representatives who would not agree to solicit their customers to participate in the aftermarket.
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.”
National Securities Corporation Fined for GPB Capital Disclosure Failures
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.
GPB Capital Securities Under Investigation
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:
- GPB Holdings, LP
- GPB Holdings II and III
- GPB Holdings Qualified, LP
- GPB Cold Storage, LP
- GPB Automotive Portfolio, LP
- Armada Waste Management
- GPB NYC Development, LP
- GPB Waste Management, LP
- GPB Eurobond Finance PLC
National Securities Corporation GPB Capital Investment Losses
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.
About KlaymanToskes
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.
