The Financial Industry Regulatory Authority fined Center Street Securities Inc. after the broker-dealer supposedly failed to inform 20 investors in offerings related to GPB Capital Holdings LLC that the issuer did not make timely required filings with the Securities and Exchange Commission, including filing audited financial statements.
FINRA fined at least seven broker-dealers in December 2022 for the improper selling of GPB Private Placements. As previously reported by The DI Wire, FINRA fined two firms this past week and four additional broker-dealers earlier in December.
According to FINRA, while Center Street received notification from GPB Capital alerting it of the delays and GPB Capital’s stated intention to complete a forensic audit, Center Street sold 16 limited partnership interests in Automotive Portfolio and four limited partnership interests in Holdings II after that announcement.
The principal value of those 20 sales, which occurred between May 4, 2018, and June 29, 2018, totaled $1.2 million. Center Street received a total of $98,727 in commissions from the sales.
Allegedly, in connection with these 20 sales, Center Street representatives did not inform the customers that Automotive Portfolio and Holdings II had not timely filed their audited financial statements with the SEC or the reasons for the delay. FINRA says the delay in filing audited financial statements and the reasons for it was material information that should have been disclosed.
Center Street consented to a censure, a $70,000 fine and partial restitution of $89,652, plus interest.