St. Louis-based Moloney Securities Co. Inc. and its related registered investment advisor closed down last month after earlier selling its assets to Berthel Fisher & Co. Inc., a holding company that runs a broker-dealer, a registered investment advisors and related financial services businesses.
Based in Cedar Rapids, Iowa, Berthel Fisher in a statement to InvestmentNews Monday did not disclose the price it paid for Moloney Securities, which has been under pressure from a variety of regulators the last couple years due to its sales of bonds issued by GWG Holdings Inc., which declared bankruptcy in 2022.
According to the statement, Berthel Fisher in December bought close to $5 billion in assets of the firm, meaning its advisors and their client accounts, and not the corporate structure of Moloney.
Berthel Fisher, long known in the independent contractor brokerage industry for selling alternative investments, now has 400 advisors nationally and more than $15 billion in assets.
Ted Moloney, the president of Moloney Securities, did not return calls Monday to comment.
Several experienced Moloney Securities employees also joined the firm, and Berthel Fisher expanded its home office presence to include a location in suburban St. Louis.
The firm recently has had the attention of securities regulators due to its sale of high risk, high cost private investments, including GWG bonds.
The Securities and Exchange Commission in September 2024 said it reached a settlement with Moloney Securities, along with three advisors, totaling $437,900 in penalties for violating Regulation Best Interest in sales of bonds issued by GWG Holdings.
Then, a year ago, Moloney Securities said in a filing with the SEC that it was also addressing “inquiries initiated by state securities regulators which are in varying phases.”
It was not clear at the time what states had been looking at Moloney Securities.
But New Hampshire last month said it had reached an order of consent with the now defunct Moloney Securities related to customers who bought GWG L bonds from the firm and two of its advisors.
The New Hampshire Bureau of Securities Regulation in February said it ordered Moloney to pay $100,000 in restitution to investors who bought L Bonds and similar investment products from GWG Holdings.
Moloney will also pay $14,000 in costs to New Hampshire. In addition, two advisors will pay $15,000 and $35,000 in disgorgement related to the commissions they received by recommending GWG L Bonds to investors.
Both advisors will be under heightened supervision by a new firm for a year, according to New Hampshire.
New Hampshire alleged that Moloney and its advisors “did not fully understand the risks of investing in GWG and, therefore, were recommending an investment that was inappropriate for their customers,” according to a statement from the regulator issued February 25.
“Financial advisors must recommend investments that fit within the framework of a customer’s investment objectives, tolerance for risk, and retirement goals,” according to the statement.
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