Corporate & Securities Law

FINRA Shuts Down Broker/Dealer GunnAllen

By Mark Maddox

The Financial Industry Regulatory Authority (FINRA) has closed the doors on GunnAllen Financial. FINRA apparently informed the financially troubled broker/dealer late last week that if it fell below mandatory net capital requirements it would be forced to close its operations.

GunnAllen?s financial issues stem to the increasing number of lawsuits being filed by investors against the firm. As reported March 22 by Investment News, investors are seeking as much as $50 million in damages, with many of the claims tied to former GunnAllen broker Frank Bluestein.

The Securities and Exchange Commission (SEC) filed fraud charges against Bluestein in September 2009 on allegations that he lured elderly investors into refinancing their home mortgages so he could fund investments in a $250 million Ponzi scheme operated by Edward May and his company, E-M Management Company LLC (E-M).

GunnAllen also is facing a slew of lawsuits by investors over sales of private placements in Provident Royalties LLC.

Full post as published by Representing Investors on March 22, 2010 (boomark / email).