Providential Holdings to Buy Stake in Texas Company

A Fountain Valley company whose chairman was permanently barred from the securities industry last month said Wednesday that it has agreed to buy a 60% interest in a Texas information technology company for cash and stock.

Providential Holdings Inc. said in a press release that it could end up acquiring all of Datalogic Consulting Inc., which has offices in Fountain Valley, Houston and Dallas. Terms of the deal were not released.

The two companies have previously worked together. Last July, Providential Holdings was instrumental in retaining Datalogic for Web site design and programming development for an Internet company in which Providential held a minority interest.

Providential’s chairman, Henry Fahman, had hoped to acquire a San Francisco investment firm. But an agreement last month with the National Assn. of Securities Dealers ended such plans.

NASD fined Providential’s brokerage, Providential Securities Inc., $115 million and barred Fahman from the industry for life. The agency charged that Fahman and his brokerage violated securities laws numerous times in peddling day-trading services to Asian Americans. The company had come under U.S. Senate scrutiny over alleged day-trading abuses. It did not admit liability in settling.

On Wednesday, Providential’s stock gained 19 cents to close at 20 cents a share in over-the-counter trading.