Two More Independents Shutter Their Doors

Two more independent broker dealers have joined the long list of firms brought to their knees because of claims related to their selling of failed private placements in Medical Capital Holdings and Provident Royalties, according to Investment News. Harrison Douglas, Incorporated, based in Aurora, CO, and WFP Securities, based in San Diego, CA, are the latest to join the growing list of independent broker dealers that have been victimized by private placement claims.

According to Harrison Douglas, they have notified FINRA and the SEC that they intend to close the firm and are terminating their registrations after being unable to pay a $200,000 FINRA arbitration award against them in April 2011 ( FINRA# 09-06647; Gilbert et al v. Harrison Douglas, Inc. et al). The claim filed by three clients asserted unsuitability, lack of due diligence and failure to supervise and sought $2.2 million in compensatory damages. Investments included Medical Capital and Provident Royalties private placements, as well as real estate investment trusts (REIT). Harrison Douglas President, Douglas Schriner, said the business that he purchased in 1995 is gone. SEC filings in June 2010 indicated that the firm had assets of $33,541.

WFP Securities is said to be facing over $14 million in claims associated with the sales of the same private placements and has notified FINRA that it intends to close its doors. WFP sold roughly $27 million of the Medical Capital notes and $6.8 million of the Provident private placement offerings, both companies were charged with fraud by the SEC in the summer of 2009.

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