Nicolaas Petrus Pronk & Noble Financial Allegedly Defrauded Clients by Recommending and Selling Nearly a Million Shares of AdCare Health Systems, Inc. (ADK)
Nicolaas Pronk and Noble Financial allegedly orchestrated an investment fraud scheme involving seven customers by making recommendations and selling nearly a million shares of AdCare Health Systems (ADK) to them without purportedly disclosing Noble’s multiple and material conflicts of interest, according to a Complaint from FINRA’s Department of Enforcement under review by attorney Alan Rosca.
Attorney Alan Rosca, of the RoscaLaw LLC firm, is investigating activity related to Nicolaas Pronk and Noble Financial’s alleged investment fraud. Investors who believe they may have lost money in activity related to Nicolaas Pronk and Noble Financial’s alleged investment fraud are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
Nicolaas Pronk and Noble Financial, in order to purportedly promote said scheme, allegedly made aggressive promotions and thus solicited purchases of ADK by issuing research through Noble’s Research Department, according to the aforementioned Complaint, and also conducted non-deal so-called road shows, the Compliant notes.
Said road shows were allegedly implemented via Noble’s Investment Banking and Institutional Sales and Trading Departments, the aforementioned Complaint reports. Pronk and Noble Financial allegedly made contact with prospective investors which were primarily institutions, the Complaint also notes.
Nicolaas Pronk and Noble Financial also allegedly provided the aforementioned registered reps with misleading sales script to use when soliciting prospective investors in ADK, the Complaint further alleges. Pronk and Noble Financial purportedly knowingly or recklessly did not tell seven customers who purchased ADK regarding four material conflicts of interest, the Complaint states.
The aforementioned material conflicts of interest including that AdCare allegedly paid Noble $6,000 a month to provide advisory services to AdCare pursuant to an Advisory Agreement entered into with AdCare in February 2011, according to the aforementioned Complaint.
Secondly, Noble also allegedly made agreements to produce capital for AdCare in exchange for a seven percent cash fee related to the total gross proceeds generated from the exercise of both publicly traded and privately-held AdCare warrants (ADK.WS) which was related to an addition to the Advisory Agreement made in April 2011, the Complaint reports.
Third, Noble allegedly promised the aforementioned brokers incredible incentive compensations in addition to regular commissions, in order to promote and solicit sales of ADK, the Complaint also states.
Nicolaas Pronk and Noble Financial, from April 2011 through September 2011, allegedly promoted and recommended ADK to prospective investors in order to profit from Noble’s undisclosed investment banking relationships with AdCare, the aforementioned Complaint reports.
What is more, Nicolaas Pronk and Noble Financial, from May 31, 2011 through September 27, 2011, purportedly helping its sales campaign to sell ADK, when Pronk and three other brokers allegedly sold an aggregate of 863,930 shares of ADK to seven customers for a total of $5,034,997.44, the Complaint states.
Nicolaas Petrus Pronk and Noble Financial Allegedly Made Aggressive Promotions and Solicited Purchases of ADK by Issuing Research through Noble’s Research Department
Nicolaas Pronk and Noble Financial’s alleged aforementioned promotion campaign also included their undisclosed arbitrage of AdCare securities which also purportedly instilled a financial incentive to recommend ADK to customers, according to the aforementioned Complaint under review by Alan Rosca.
Furthermore, Nicolaas Pronk and Noble Financial’s alleged risky arbitrage trading strategy involved ADK and publicly-traded AdCare warrants, the Complaint further notes. Later, Noble exercised the warrants it held long and, using the common shares it received through the exercises, covered its short position in ADK.
Nicolaas Pronk and Noble Financial, in connection to the aforementioned arbitrage, and through Noble’s proprietary accounts, allegedly purchased and held ADK, and also allegedly sold short ADK to its customers, the Complaint also reports.
Said respondents engaged in the arbitrage to profit from the spread between the cost of buying and exercising ADK.WS and the proceeds generated by short-selling ADK, and to generate Noble’s seven percent fee under the Warrant Agreement.
Nicolaas Pronk and Noble Financial, based on the foregoing alleged fraudulent conduct, violated Sections of the Securities Exchange Act of 1934 and also allegedly violated FINRA Rules, the Complaint notes.
Finally, Pronk also allegedly kept full control over all Noble Financial activities including proprietary trading, sales, investment banking, and the decision to initiate and prioritize the promotion and sale of ADK, the Complaint also reports.
Securities Lawyer Investigating
The RoscaLaw firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Nicolaas Pronk and Noble Financial’s alleged investment fraud. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions, and has helped recover tens of millions of dollars on behalf of investors.
Investors who believe they lost money as a result of Nicolaas Pronk and Noble Financial’s alleged investment fraud may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at firstname.lastname@example.org, or through the contact form on this webpage.