Articles Tagged with Florida Failure to Supervise Attorney

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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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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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Girard Securities, Inc. (Girard Securities) is the subject of a massive audit by the U.S. Securities and Exchange Commission (SEC). The primary focus of the audit will be on the supervision of the registered representatives and financial advisors in its branch offices. With over 230 producing registered reps and financial advisors, the big question is, How will Girard Securities fare under the microscope of the SEC?

Girard Securities has been acquired by RCS Capital Corp., an acquisition awaiting the approval of the Financial Industry Regulatory Authority (FINRA). Approval is expected at the end of February, according to a memo from Girard Securities’ Chairperson and Chief Executive, Susie Woltman Tietjen. RCS Capital Corp.’s purchase of Girard Securities, plus its August 2014 purchase of VSR Financial, with its 264 registered representatives and financial advisors, means that RCS Capital Corp. will have nearly 9,700 registered reps and advisors! It appears that the SEC is right on target with its audit priority of branch office supervision! Continue reading →