Another Private Placement Brokerage Firm Shuts Down

Wednesday, October 19, 2011 06:46
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Another Private Placement Brokerage Firm Shuts Down

Tags: broker-dealers

Lethal securities from Provident Royalties claim one more firm that sold them to unsuspecting clients.

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Boogie Investment Group in Florida has asked FINRA and state regulators to pull its licenses.

 

Even though it only sold about $400,000 worth of the Provident notes that doomed many other broker-dealers, Boogie was a small one-man operation, so it was still a big product for the firm.

 

In fact, Boogie barely cleared that much production last year and saw all but $1,000 of it eaten up in expenses.

 

The firm also faces about $400,000 in fines and fees if its appeal of an arbitration finding against it fails. 

 

Schwab was also named in the case against Boogie -- yet another indication that even the biggest companies in the business are still getting dragged into the backwash of these failed investments and the firms that sold them.

 

And it highlights the importance of due diligence. If an advisor can't prove that he or she kicked the tires of an "exotic" instrument, then he or she gets caught in the failure.

 

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