Sales of private placements in Provident Royalties have become the undoing of yet another broker/dealer. Workman Securities announced earlier this week of its plans to close in November, telling 100 advisers they could move as a group to Virginia-based Allied Beacon Partners.
As reported Aug. 5 by Investment News, Workman representatives who agree to the move were promised a smooth transition, with Allied agreeing to keep Workman’s payout schedule or grid for two years.
In the summer of 2009, Provident Royalties was charged with fraud by the Securities and Exchange Commission (SEC). Workman was a large seller of private placements in Provident, selling $9 million of the investments.
According the Investment News story, Workman had up to 20 unsettled investor complaints relating to losses from sales of private placements in Provident Royalties.
In shuttering, Workman Securities joins dozens of other broker/dealers that met a similar fate because of private placement deals gone bad in Provident and another sponsor in bankruptcy, Medical Capital Holdings.
In February, Workman reached an agreement with the Financial Industry Regulatory Authority (FINRA) to pay $700,000 for partial restitution to more than a dozen clients who had sued the B-D over investments in both Provident Royalties and Medical Capital.