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Articles Tagged with Purshe Kaplan

Boutique Broker-Dealer Pays Another 7-Figures to Resolve Customer Disputes 

Independent brokerage firm Purshe Kaplan Sterling Investments, Inc. has agreed to settle another Financial Industry Regulatory Authority (FINRA) arbitration claim with investors.  This time, 50 customers had pursued financial recovery from the firm. 

According to the broker-dealer’s yearly audited financial statement that it recently submitted with the Securities and Exchange Commission (SEC), the settlement amount is $1.6M. Wentworth Management Services, which owns the firm, will pay $1.2M while its insurer will cover the rest.

An alternative investment fraud settlement has been reached between Purshe Kaplan Sterling Investments and the Saginaw Chippewa Indian Tribe of Michigan, in which the independent broker-dealer will pay $9.5M. The tribe had filed an arbitration claim contending that it didn’t know that it was paying the firm millions of dollars in commissions on $190M of alternative investments that were purchased through former Purshe Kaplan broker Gopi Krishna Vungarala between 2011 and 2015, including shares in business development companies and non-traded real estate investments trusts (REITs).

Vungarala was not only the Michigan tribe’s broker but also he served as its investment manager, tasked with overseeing its portfolio. He has been accused by the Financial Industry Regulatory Authority (FINRA), too, of to the tribe about the commissions.

The self-regulatory authority (SRO) recently sought to bar the Purshe Kaplan broker from the industry after the alleged fraud occurred—a motion that is on appeal. FINRA also ordered him to disgorge nearly $9.7M plus interest. The SRO said that Vungarala neglected to tell the tribe that it qualified to receive over $3.3M in volume discounts, which would have lowered how much he made in commissions from the sales.

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