Articles Posted in Brokerage Firms In The News

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A complaint filed against Calton & Associates Inc., located in Tampa, Florida, and Kenneth Harter of Roland, Arkansas alleges that they “charged customers prices that were not reasonable in municipal bond transactions.” The complaint alleges that R.M. Duncan Securities, acting through two of its representatives and, eventually, Calton & Associates and Mr. Harter, sold bonds to its customers at unfair prices. R.M. Duncan Securities representatives allegedly solicited three elderly customers to purchase a total of $215,000 par value of the bonds.

According to FINRA, the representatives told their clients the bonds “would receive an 11% tax-free yield on the bond interest payments, despite the fact that the bonds were in default and not paying full interest.” Calton & Associates and Mr. Harter allegedly solicited customers to purchase bonds that were purchased from the R.M. Duncan Securities at a price that was 60% higher than the prevailing market price. FINRA alleges that R.M. Duncan Securities and Calton & Associates worked in “concert” to make the inter-dealer appear higher than the market price to pull off their scheme. FINRA alleges the brokerage firms failed to supervise their municipal securities activities and prices and are currently under investigation. Continue reading →

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WFG Investments, Inc. of Dallas, Texas submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but it did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to conduct appropriate due diligence and supervision with respect to a private placement offering and that a registered representative sold an investment away from the firm as an approved private securities transaction.

FINRA found that in various times between March 2007 and January 2014, “the Firm failed to commit the necessary time, attention and resources to an array of critical regulatory obligations related to its supervision of registered representatives.” Clients who invested in the private placement offering allegedly lost their entire investment. FINRA also found that WFG Investments failed to supervise its representatives, who allegedly recommended the sale of high risk equity and ETF purchases for a retired client with conservative risk tolerance. In addition, WFG Investments failed to supervise a representative’s private securities transactions. According to FINRA, the WFG representative allegedly structured and sold two funds that had substantial investments (exceeding the 50% limit) without investors’ knowledge. All private placement investors allegedly “lost 100% of their investments resulting from a related entity’s fraudulent business practices.” Consequently, WFG Investments was censured and fined $700,000 by FINRA. Continue reading →

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Geoffrey Richards Securities Corp. of Hypoluxo, Florida submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it conducted securities business after the firm’s net capital fell below its minimum requirement.

FINRA member since 2002, Geoffrey Richards Securities Corp. (Geoffrey Richards) is a firm that specializes in securities. FINRA found “between June 2010 and January 2013, Geoffrey Richards acted as an underwriter in a firm commitment offerings, conducted a securities business while it was net capital deficient, failed to file to the requisite net capital deficiency notifications, filed inaccurate Financial and Operational Combined Uniform Single (FOCUS) Reports, and maintained inaccurate books and records.” Mr. Richards’ alleged involvement as underwriter in the firm commitment offering required deductions to the firm’s net capital to be made. For an eight day period, the firm’s net capital fell below its minimum requirement. For violation of several FINRA, NASD, and SEC Rules, Geoffrey Richards Securities Corp. was fined $40,000. Continue reading →

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Clearview Correspondent Services, LLC (Clearview) of Richmond, Virginia submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to report positions to the Large Options Position Reporting (LOPR) system.

According to FINRA, Clearview (now known as BB&T Securities), failed to properly aggregate positions of over 1,000 accounts that were acting in concert under the coms review periods. In addition, FINRA found that the firm failed to “establish and maintain a supervisory system that was reasonably designed to achieve compliance with the applicable securities laws and regulations, and FINRA Rules, concerning the reporting of options positions to the LOPR.” Consequently, Clearview, n/k/a BB&T, was censured and fined $1,000,000. Continue reading →

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Dawson James Securities, Inc. of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it “failed to establish and implement an adequate system to determine whether a former registrant’s disclosed outside business was properly characterized as an outside business activity or whether it should be treated as an outside securities activity subject to the requirements of NASD Rule 3040.” Continue reading →

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Michael Hadden, a former broker with UBS Wealth Management (UBS), has made claims that UBS allegedly made it “impossible” for his to continue working due to “… its various unethical practices with respect to customers …” as stated in his original arbitration claim with the Financial Industry Regulatory Authority (FINRA).

Mr. Hadden has asked a federal court, the U.S. District Court for the Western District of Kentucky, to overturn FINRAs arbitration award which ordered him to repay over $300,000 in bonus money, attorneys’ fees and interest. According to Mr. Hadden’s court filings, UBS would allegedly mislabel conservative investors as moderate in order to avoid future restitution and penalties. As Mr. Hadden noted in his court documents, “… the risk reporting system is done … to protect UBS from future claims of lack of suitability from the client or FINRA.”
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Citigroup Global Markets Inc., (Citigroup) submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but it did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to deliver prospectuses with respect to the sales of exchange-traded funds (ETFs) to its investor customers.

According to FINRA, Citigroup failed to deliver prospectuses for nearly 255,000 investor purchases of approximately 160 ETFs over a three-month period. Further, FINRA found that from 2009 through April 2011, Citigroup may have failed to deliver prospectuses for more than 1.5 million purchases of ETFs by investors. Moreover, Citigroup’s supervisory system failed to achieve compliance with Federal securities laws with regard to prospectus-delivery requirements, especially since the firm allegedly detected certain failures back in 2009. Continue reading →

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Newbridge Securities Corporation (Newbridge) of Fort Lauderdale, Florida was fined $138,000 by the Financial Industry Regulatory Authority (FINRA) for failing to supervise corporate bond transactions. Without admitting or denying the findings, Newbridge consented to FINRA’s sanctions and to the entry of findings that it sold corporate bonds to investors and failed to sell the bonds at a fair price, considering the relevant circumstances, like market conditions.

FINRA found that Newbridge failed to conduct proper due diligence with respect to the best inter-dealer market and thereby failed to buy or sell the corporate bonds in a market which would result in a price to its investors which was as favorable as possible.
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Popular Securities, Inc. n/k/a Popular Securities, LLC, was fined $125,000 by the Financial Industry Regulatory Authority (FINRA) for failure to supervise violations involving over-concentration of investments in Puerto Rico municipal bonds and closed-end bond funds in many of its customers’ accounts.

Without admitting or denying the findings, Popular consented to the sanctions and to FINRA’s findings that between July 1, 2011 and June 30, 2013, it failed to supervise its customers’ Puerto Rico bond fund investments, even after the bond rating had been downgraded to junk bond status. Following the junk bond downgrade, FINRA found that Popular Securities’ customers continued to purchase concentrated positions of the Puerto Rico securities. Continue reading →