Anthony Warren Thompson, chief executive officer and sole member of Thompson National Properties, LLC (of which TNP Securities was a wholly owned subsidiary), was permanently barred by the Financial Industry Regulatory Authority and forced to pay restitution to investors on terms addressed in a Extended Hearing Panel Decision containing findings that Thompson made material omissions and misrepresentations in connection with the sale of private placement securities. Department of Enforcement v. Anthony Warren Thompson, No. 2011025785602 (Mar. 30, 2015).
According to the Decision, from 2008 though 2012, Thompson and his company promoted and sold private placement investments to investors in order to raise the operating capital for TNP. In the process, TNP reportedly guaranteed payments of principal and interest to investors in three of the private placements that it sponsored via three of Thompson’s wholly owned subsidiaries. TNP Securities acted as the wholesale broker-dealer for one of the 3 placements, PPP notes.
The Decision stated that Thompson was in control of TNP Securities and all of the Guaranteed Notes LLCs, considering he was ran TNP, which was the managing member and direct owner of TNP Securities. In effect, Thompson was able to raise nearly $50 million through Guaranteed Notes sales by organizing a national network for marketing and selling the TNP placements to broker-dealers in retail business.
The Decision indicated that during the offering period for the Guaranteed Notes, TNP’s financial condition was significantly different then how it was represented to investors in balance sheets and other financial statements. Unbeknownst to investors, the financial condition of TNP was rapidly deteriorated and the firm had sustained massive operating losses in declines in equity.
FINRA found that in making material omissions and misrepresentations to investors regarding the Guaranteed Notes in the offering materials (particularly referring to TNP’s financial status), Thompson had violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5, NASD Conduct Rules 2110 and 2120, FINRA Rules 2010 and 2020. TNP Securities, LLC, was found to have violated Section 10(b) of the Exchange Act, Rule 10b-5, FINRA Rules 2010 and 2010. TNP Securities was additionally found to have violated FINRA Rule 2010 and NASD Rule 3010 for failing to supervise offerings of private placement securities. As a result of the aforementioned conduct, Financial Industry Regulatory Authority expelled TNP Securities, while barring Thompson from associating with any FINRA member firm in any capacity.
Section 10(b) of the Exchange Act makes it unlawful “to use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.”
Four elements are necessary to show in finding a violation of Section 10(b) of the Exchange Act, Rule 10b-5: 1) misrepresentations and/or omissions were made; 2) misrepresentations and/or omissions were material; 3) representations and/or omissions were made with requisite intent (e.g. scienter), and 4) misrepresentations and/or omissions were made in connection with the purchase or sale of securities.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
