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Purshe Kaplan Reaches $1.6 Million Settlement with SEC

Posted on Monday, April 12th, 2021 at 6:25 pm    

Purshe Kaplan Sterling Investments

In March 2021, Albany, New York-based Purshe Kaplan reached a $1.6 million settlement with 50 clients, without citing a cause, according to the company’s annual audited Focus report filed with the Securities and Exchange Commission (SEC). As part of the settlement, Wentworth Management Services (the firm’s owner) is paying $1.2 million, and its insurer is paying the remaining $400,000, according to the firm’s Focus report. 

Online reports indicate that Purshe Kaplan was one of 60 firms that sold the GPB Capital Holdings private placements resulting in client investment losses.

GPB Capital Holdings is a New York-based investment firm that offers exempt, private-placement securities. These investments inherently have a high degree of risk due to their nature as unregistered securities offerings (and without regulatory oversight). It is alleged that brokerage firms that sold GPB Capital Holdings and their brokers who recommended GPB Capital Holdings to their clients may not have conducted appropriate due diligence on the funds.

According to public records, Purshe Kaplan has had $16 million in settlements and restitution to clients since 2017. In 2019, the firm paid $9.5 million related to the sale of alternative investments to a Native American tribe in Michigan. This is the third year in a row that the firm is reaching $1 million-plus settlements. In 2020, Purshe Kaplan paid $1.5 million to the St. Jude Heritage Medical Group pension plan, after the broker James Casey (CRD# 1791115) was found to engage in outside business activities. In 2017, Purshe Kaplan paid $3.4 million in restitution to the Native American tribe and $750,000 for failing to supervise Gopi Vungarala (CRD# 4856193) who made alternative investment sales during the period of 2011 to 2015.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Purshe Kaplan may be liable for investment or other losses suffered by its customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.