Tony Thompson, the one-time leading vendor of private real estate assets known as “tenancies in common” transactions has been barred from the securities industry.
As it turns out, Mr. Thompson “made material misrepresentations and omissions in the sale of private placement securities to investors” and therefore violated security industry rules, according to the Financial Industry Regulatory Authority (FINRA).
FINRA claimed in 2013 that Mr. Thompson deceived and defrauded investors who borrowed $50-million from the broker-dealer he owned, TNP Securities. The notes were never repaid and went into default.
FINRA demanded Mr. Thompson to cover $36.2 million in restitution to clients. In accordance with an administrative order, FINRA also asserted that investment losses were caused by significant omissions and misrepresentations that wound up getting both Thompson and TNP Securities kicked out of the securities industry.
It now appears that TNP Securities was the middleman for Mr. Thompson’s numerous products, such as the private offerings at the core of FINRA’s decision to bar him from the industry. The FINRA decision also stated that TNP did not disclose the negative-equity for $18-million in the private placement documents.
As part of his defense before FINRA, Mr. Thompson argued that he could not be held liable for deficiencies in the note programs because he, along with his broker-dealer, relied on a group of purportedly qualified experts, including legal counsel. These experts, he claimed, had been the driving force in deciding what needed to be included in the private placement offering documents.
Mr. Thompson did admit that as chief executive of TNP, he was the person ultimately responsible for the information incorporated and/or overlooked from the offering materials. Thompson nevertheless maintained that the misrepresentations came from his good faith reliance on data and advice he obtained from others, specifically his accountants and his counsel.
That notion was batted away by FINRA. They claimed the e-mail communications showed Thompson’s broad knowledge of the specifics related to the offering materials; his famous executive model; and even his ability to deny, rather than rely upon, the assistance of his advisors. Thompson’s and TNP Securities’ misrepresentations in the sale of TIC’s are all too common among those who sell these types of investments to individual investors looking for safe, secure investments.