Newbridge Securities Corporation (Newbridge) of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs) in violation of FINRA Rule 2010.
A UIT is a type of Investment Company that issues securities and holds a fixed portfolio. UITS typically offer “break points” which reduce client fees based on the amount invested. FINRA requires that all UIT transactions take place “on the most advantageous terms available to the customer.” FINRA investigators found that Newbridge failed to apply sales discounts to customers resulting in clients paying excessive charges.
From May 1, 2009 to April 30, 2014 FINRA alleges Newbridge failed to establish, maintain and enforce a supervisory system and adequate written supervisory procedures reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases. As a result, FINRA investigators found Newbridge failed to apply sales charge discounts to 915 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $172,835.29.
FINRA found that this alleged misconduct is a violation of NASD Rule 3010 and FINRA Rule 2010. Without admitting or denying the FINRA allegations, Newbridge agreed to the sanctions and was ordered to pay a $115,000 fine and to pay restitution to the affected customers in the total amount of $188,803.99.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like Newbridge Securities Corporation, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Newbridge Securities Corporation account due to any broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Newbridge Securities Corporation stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.