Nov 5 (Reuters) - The Financial Industry Regulatory Authority (FINRA) has filed a temporary cease-and-desist order against WR Rice Financial Services and its owner Joel Wilson to halt alleged fraudulent sales of limited partnership interests to investors.
FINRA, Wall Street’s industry-funded regulator, said the Michigan-based brokerage fraudulently sold more than $4.5 million in limited partnership interests to about 100 investors mainly from low-to-moderate-income households.
The regulator also issued a complaint saying the sale was in entities affiliated with Diversified Group and American Realty Funds Corp, companies controlled by Wilson.
FINRA alleges that the company promised investors that the proceeds would be invested in land contracts in Michigan and would pay an interest of 9.9 percent.
However, the funds were used to make unsecured loans to the companies, FINRA said.
Wilson has also been charged with providing fabricated documents related to the limited partnership offerings and with failing to provide full testimony during FINRA’s investigation.