According to a report in Investment News, FINRA has recently filed a complaint against noted real estate investor Tony Thompson, alleging that he deceived and defrauded investors who bought $50 million in high-yield promissory notes sponsored by Thompson National Properties LLC.
According to the FINRA complaint, Thompson National Properties sold three notes programs from 2008 to 2012 using a network of independent broker-dealers. Mr. Thompson’s broker-dealer is TNP Securities LLC and TNP Securities is also named in the complaint.
The complaint further alleges that TNP Securities and Mr. Thompson “engaged in transactions, practices or courses of business which operated as a fraud or deceit upon the purchaser” of the note securities. One of those series of private notes is purportedly in default, while two others have stopped making payments to clients.
The complaint also alleges that Mr. Thompson and TNP Securities are in violation of Securities and Exchange Act of 1934, as well as Finra’s Rule 2020, which prohibits the use of manipulative, deceptive or other fraudulent devices by registered representatives and broker-dealers.
The report also states that FINRA has had Mr. Thompson and TNP Securities under investigation since last winter for allegedly failing to cooperate in a FINRA investigation.
The FINRA complaint indicates that the focus of FINRA’s investigation and their issue with Mr. Thompson and his corporate entities is the level of disclosure of the financial difficulties at Thompson National Properties in the private placement memorandum.
The three note programs at the heart of the Finra complaint are the TNP 12% Notes Program LLC, the TNP 2008 Participating Notes Program LLC and the TNP Profit Participation Program LLC.
This is a situation that The White Law Group has been following for some time. For our previous posts on this subject visit http://www.whitesecuritieslaw.com/2013/03/13/more-bad-news-for-thompson-national-properties-investors/, or http://seekingalpha.com/instablog/1047207-d-daxton-white/1272851-tnp-strategic-retail-trust-announces-interest-rate-cut.
The White Law Group’s investigation focuses on the liability that brokerage firms, including potentially TNP Securities, may have for recommending the TNP 12% Notes Program LLC, the TNP 2008 Participating Notes Program LLC, and the TNP Profit Participation Program LLC.
Brokerage firms have a fiduciary duty to perform adequate due diligence on any investment they offer. Firms also have a duty to only recommend investments that are appropriate for their clients in light of their clients’ particular age, investment experience, net worth, and investment objectives. Given the current state of the TNP Notes, and the problems discussed in the FINRA complaint, it seems that many firms recommended the TNP Notes inappropriately. If proven, investors in these products may be able to recover their losses through a FINRA arbitration claim.
To speak with a securities attorney regarding your litigation options, please call The White Law Group at 312/239-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.