Finra: Bathgate consents to findings, pays fines over PIPE disclosure

By Jennifer Chiou

New York, Feb. 15 - The Financial Industry Regulatory Authority, Inc. reported that Bathgate Capital Partners LLC (known as GVC Capital LLC) submitted a letter of acceptance, waiver and consent in its February report on disciplinary actions.

Finra said that Colorado-based Bathgate was censured and fined $13,500.

Bathgate did not admit or deny the findings.

According to the report, Bathgate consented to findings that it acted as a placement agent in a private investment in public equity offering under Regulation D of the Securities Act of 1933.

Finra's findings stated that the firm distributed to customers via e-mail an executive summary the company prepared that failed to contain any discussion of the risks associated with investing in the company and failed to disclose that the company's current audited financial statements said that:

• The company's history of losses raised substantial doubt concerning its ability to continue as a going concern;

• The company had an accumulated deficit of $85,413,000;

• It had never made a profit;

• Its business was dependent on sales of a single product or product line; and

• Its losses totaled more than its revenues for a couple of years.

Finra added that the findings also stated that the firm's communications were not based on principles of fair dealing and good faith, were not fair and balanced and did not provide a sound basis for evaluating the facts in regard to any particular security or type of security, industry or service.

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