The Financial Industry Regulatory Authority Inc. last week fined another broker, this time wealth management aggregator Sanctuary Securities Inc., for negligently selling private placements of GPB Capital Holdings to clients in light of GPB’s failure in 2018 to publish audited financial statements for high risk, high commission investments.
In the settlement, Sanctuary Securities, along with 270 registered representatives and financial advisers, accepted Finra’s findings without admission or denial. Last Friday, the company was fined $60,000 and agreed to pay restitution of $48,000, plus interest, to affected customers.
The Indianapolis-based company was known as David A. Noyes & Co. until March 2020, when it changed its name to Sanctuary as part of a change in direction and control within the company. society, according to Finra.
The actions described in the Finra settlement predate David A. Noyes’ acquisition by Sanctuary Wealth in 2018, a company spokesperson wrote in an email. “The David A. Noyes brand no longer exists and no former members of the management team are currently employed by Sanctuary Wealth. We are happy to have resolved this prior issue.
The actions covered by the settlement date back to June 2018; that was when financial advisers and clients who had purchased GPB private placements were waiting for the company to file financial statements with the Securities and Exchange Commission for two of its largest funds, even though both funds had crossed industry thresholds to make this information public a year earlier.
After missing its deadline to file audited financial statements, GPB struggled, cutting dividends on some of its private placements. Last year, its founder David Gentile and other top executives were charged with fraud by the Justice Department.
According to Finra.
GPB Capital, a New York-based alternative asset management firm founded in 2013, has been the general partner of limited partnerships formed to acquire income-generating companies such as car dealerships and waste companies. GPB eventually raised $1.8 billion from investors. GPB has sold assets, but has yet to release clear plans on how investors are to recoup the money from those deals.
Meanwhile, Sanctuary Wealth said Friday it has hired Mary Ann Bartels as chief investment strategist. According to the company, Bartels spent more than two decades at Bank of America Merrill Lynch, where she was responsible for technical and market analysis, and headed the research investment committee.