Top executives of various broker/dealers that sold private placements in Medical Capital Holdings and Provident Royalties have been fined and sanctioned by the Financial Industry Regulatory Authority (FINRA).
Among the executives cited for failing to conduct a reasonable investigation of private placement sales offered by Medical Capital Holdings and/or Provident Royalties:
· Robert Vollbrecht, Workman Securities’ former President. Vollbrecht was barred in any principal capacity and fined $10,000.
· Timothy Cullum, former Chief Executive Officer, and Steven Burks, former President of Cullum & Burks Securities of Dallas, Texas, a now-defunct firm. Both men were each suspended in any principal capacity for six months and fined $10,000.
· Jeffrey Lindsey and Bradley Wells, two former executives with Capital Financial Services. Lindsey and Wells have been suspended for six months in any principal capacity and fined $10,000.
· Jay Lynn Thacker, former Chief Compliance Officer for Meadowbrook Securities, LLC (aka Investlinc Securities, LLC). Thacker was suspended for six months in any principal capacity and fined $10,000.
· David William Dube, former Owner, President, Chief Compliance Officer and Anti-Money Laundering (AML) Compliance Officer of (now-defunct) Peak Securities Corporation. Dube was barred for failing to conduct adequate due diligence, as well as a failure as AML Compliance Officer to detect, investigate and report numerous suspicious transactions in 10 customer accounts where “red flags” existed.
According to FINRA, without performing proper due diligence, the broker/dealers that sold the private placements could not identify and understand the inherent risks of the offerings. Moreover, the sanctioned principals did not have reasonable grounds to allow the firms’ registered representatives to continue selling the offerings despite the red flags that existed regarding the private placements.