According to an article posted by InvestmentNews, securities regulators are seeking information from six brokerage firms concerning the sales of two private placements that blew up last summer.
The Massachusetts Securities Division is requesting information on due-diligence efforts, suitability data and promotional materials related to the sale of private placements marketed by Medical Capital Holdings Inc. and Provident Royalities LLC, according to the statement.
The regulator has been increasing its scrutiny of sales of private placements by independent broker-dealers. In late January, the Securities Division slapped Securities America Inc. with a lawsuit, alleging that the firm misled investors who were sold high-risk private placements.
Specifically, the agency alleged that Securities America advisers sold $7.2 million in promissory notes to Massachusetts investors without disclosing all the risks involved. That case is pending.
Medical Capital and Provident issued billions in notes and other securities sold by a number of broker-dealers, according to today’s statement.
“It also has become apparent that Securities America Inc. was not the only broker-dealers selling these” private placements, according to the statement.
Mark Goldwasser, CEO of National Securities, said he hadn’t yet seen the subpoena and therefore could not comment.
Officials at the five other broker-dealers were not immediately available for comment.
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