Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, Moloney Securities Co., Inc. (CRD # 38535) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its sales of GPB Capital Holdings, LLC (GPB Capital) to customers.

The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Moloney Securities Co., Inc. and/or their investment in GPB Capital.

Registration Background for Moloney Securities Co., Inc.

Moloney Securities Sanctioned by FINRA for Its Sales of GPB Capital Holdings to Customers (1)Moloney Securities Co., Inc. has been a member firm of FINRA since 1995. It is headquartered in Manchester, MO and conducts a general securities business. During the relevant period of the investigation, it had 50 branch offices with approximately 130 registered representatives.

FINRA’s Allegations Against Moloney Securities Co., Inc.

According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated December 28, 2022 (No. 2018060441601), Moloney Securities Co., Inc. consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:

  • “On April 27, 2018, GPB Capital sent letters containing what it characterized as important updates regarding the audited financial statements for certain of its limited partnerships, including Automotive Portfolio and Holdings II”;
  • “The letters which were received by firm management and representatives, stated that GPB Capital was in the process of registering certain classes of securities issued by certain of the limited partnerships, including Automotive Portfolio and Holdings II, with the SEC”;
  • “As part of that process, Automotive Portfolio and Holdings II were required to file audited financial statements”;
  • “The letters further stated that the delivery of Automotive Portfolio’s and Holdings II’s audited financial statements (which were due to be filed by April 30, 2018) would be delayed pending the completion of a forensic audit”;
  • “While [Moloney Securities Co., Inc.] received the letter from GPB Capital notifying it of the delays and GPB Capital’s stated intention to complete a forensic audit, [Moloney Securities Co., Inc.] sold 34 limited partnership interests in Automotive Portfolio and three limited partnership interests in Holdings II after the date of the letter”;
  • “In connection with these sales, however, [Moloney Securities Co., Inc.] 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”;
  • “The delay in filing audited financial statements was material infom1ation that should have been disclosed”; and
  • By virtue of its actions, Moloney Securities Co., Inc. violated FINRA Rule 2010, regarding standards of commercial honor and principles of trade.

FINRA Sanctions Moloney Securities Co., Inc.

As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s December 28, 2022 AWC also indicates that Moloney Securities Co., Inc. consented to the following sanction(s):

  • A censure; and
  • Partial restitution of $268,082.64 plus interest.

Moloney Securities Co., Inc. Has A History of Securities Industry Regulatory Sanctions

SECIn addition to Moloney Securities Co., Inc. being sanctioned by FINRA for its sales of GPB Capital to customers, FINRA BrokerCheck for Moloney Securities Co., Inc. reveals it has a prior history of regulatory sanctions, including but not necessarily limited to the following:

  • On May 4, 2020, Moloney Securities Co., Inc. entered into FINRA Letter of Acceptance Waiver and Consent (No. 2015046315102), in which it consented to without admitting or denying findings that it failed to establish and maintain a written supervisory system reasonably designed to achieve compliance with FINRA’s supervisory rule with respect to qualitative suitability and concentration in high-risk products. It was censured, fined $100,000.00 and ordered to pay restitution in the amount of $15,574.13 plus in interest.
  • On September 30, 2016, Moloney Securities Co, Inc. entered into settlement with the U.S. Securities and Exchange Commission (SEC) (SEC Admin. Release 34-70993) after the SEC instituted public administrative proceedings against the firm. The proceedings arose out of Moloney Securities Co., Inc.’s “multiple and repeated violations” Advisor’s Act after the SEC had issued deficiency letters in 2006, 2009 and 2012. It was censured and ordered to pay a civil money penalty in the amount of $34,000.00.

Moloney Securities Co., Inc. Has A History of Customer Complaints

In addition to Moloney Securities Co., Inc. being sanctioned by FINRA for its sales of GPB Capital to customers and its history of regulatory actions, FINRA BrokerCheck for Moloney Securities Co., Inc. reveals it has a prior history of customer complaints and/or arbitrations, including but not necessarily limited to the following:

  • On March 30, 2002, a customer-initiated arbitration was commenced against Moloney Securities Co., Inc. The customer alleged churning, suitability, and failure to supervise. The customer further alleged damages in the amount of $40,000.00. On May 23, 2003 the arbitration panel rendered an award against the company in the amount of $10,675.00.
  • On September 12, 2018, a customer-initiated arbitration was commenced against Moloney Securities Co., Inc. The customer alleged breach of fiduciary duty, misrepresentation, suitability, and failure to supervise. The customer further alleged damages in the amount of $33,800.90. On May 15, 2009, the arbitration panel rendered an award against the company in the amount of $9,970.00.
  • On May 25, 2011, a customer-initiated arbitration was commenced against Moloney Securities Co., Inc. The customer alleged breach of fiduciary duty, misrepresentation, suitability, negligence and failure to supervise. The customer further alleged damages in the amount of $2,381,722.00. On December 18, 2012, the arbitration panel rendered an award against the company in the amount of $50,000.00.

Have You Lost Money with Moloney Securities Co, Inc. or GPB Capital Holdings?

If you or someone you know has or had a brokerage account with Moloney Securities Co., Inc. and have concerns regarding losses in your investment GPB Capital Holdings or other possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.