Finra tags advisor for sales of GPB alternatives

investmentnews.com:

The Financial Industry Regulatory Authority Inc. has penalized plenty of broker-dealers over sales of private placements manufactured by GPB Private Holdings, typically for selling the high-risk securities in 2018, when GPB had failed to file required audited financial statements for two of its biggest limited partnerships with the Securities and Exchange Commission.

Now, it appears that Finra’s enforcement office is starting to take a harder look at the individual brokers and financial advisors who sold the GPB private placements, which were limited partnerships formed to acquire income-producing companies such as auto dealerships and trash businesses. GPB raised $1.8 billion from retail investors starting in 2013, but it hit the skids five years later when it failed to file audited financials with the SEC.

On Monday, Finra fined a broker, Arni J. Diamond, $5,000, and suspended him from the securities industry for four months as a result of alleged unsuitable recommendations of GPB private placements to two clients that totaled $250,00 and occurred prior to 2018, according to Finra.

At the time he sold the GPB securities, Diamond was registered with a broker-dealer called Kalos Capital Inc., which a year ago said it was closing down and filing for bankruptcy because it was swamped with $9 million in legal fees and costs related to sales of GPB private placements.

Diamond couldn’t be reached Tuesday to comment as the phone to his eponymous firm in Jacksonville, Florida, had been disconnected. According to his settlement with Finra, he accepted the regulator’s findings in the matter without admitting to or denying them. Diamond has two pending customer complaints, according to BrokerCheck, and 13 settled customer