Brokerage Firm Alert: Our Investment Fraud Attorneys Are Investigating Securities America Inc.
Did You Lose Money Because of Securities America? Are You Aware of Complaints and Fines Against Securities America?
Updated on: December 27, 2023
Securities America Inc. (“Securities America”) (CRD # 10205) is a broker-dealer and has been the subject of at least fifty-six (56) complaints filed by regulatory organizations like FINRA and many more by investors like yourself. At Patil Law, we have investigated Securities America, its regulatory complaints and fines, and its customer complaints. If you’ve invested your hard-earned money with Securities America, you should be very concerned about any regulatory actions, regulatory fines, or customer complaints against your brokerage firm.
Our team of attorneys specialize in representing investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. As an investor, you may be entitled to compensation for losses accrued due to mismanagement of your investments.
If you believe you have a claim against Securities America, you should strongly consider hiring an investment fraud lawyer and not wait until it’s too late to file a claim. Reach out to our legal team via the secure and private online form or call our firm directly toll-free at 1-800-950-6553 for a free consultation so that we can discuss your case and see what we can do to help you get the compensation you need and deserve. We do not charge anything for the ability to discuss your matter and evaluate your potential case.
Jump to Topic
Do I Have an Investment Fraud Case Against Securities America?
How To File a Claim Against Securities America To Get Your Money Back
Client Complaints – Is Your Financial Advisor on This List?
Did Misconduct By a Securities America Advisor Impact Your Investments? What Can You Do?
Securities America Has Many Regulatory Complaints and Fines
A Closer Look Into Securities America’s Regulatory Issues
Next Steps and Free Consultation with Our Legal Team
Do I Have an Investment Fraud Case Against Securities America?
✅ YES, if you’ve experienced financial losses due to the actions or misconduct of Securities America or its staff, you have the right to pursue legal action against them. You can sue Securities America but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.
FINRA arbitration proceedings are generally private proceedings that can last anywhere from a few months to approximately a year. Our attorneys have personal experience in representing clients in FINRA arbitration proceedings and know very well how you can not only sue Securities America in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a case against Securities America is to reach out to our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a complimentary consultation.
Who is Securities America?
Securities America (CRD # 10205) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors. As a registered broker-dealer, Securities America is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests. A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
How To File A Claim Against Securities America To Get Your Money Back
If you have questions about Securities America, its advisors, or the management or performance of your accounts, please contact our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a free and complimentary initial consultation. Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date.
We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money. We can help you, as we have helped hundreds of other clients in the past.
Client Complaints – Is Your Financial Advisor on This List?
There have been scores of customer complaints filed against Securities America stockbrokers and investment advisors over the years. Many of these complaints deal with financial advisor misconduct, poor or unsuitable investment recommendations, failure by these brokerage firms to supervise their employees (the financial advisors), and general fraud against consumers. We have launched many investigations of current and former Securities America advisors:
- Sean Sullivan currently unaffiliated (previously with Arete Wealth Management and Securities America)
- David White with Cambridge Investment Research (previously with First Western Advisors and Securities America)
- Paul Freitag with Cambridge Investment Research (previously with Securities America)
- Annetta Marie Box currently barred (previously with Cambridge Investment Research and Securities America)
- Andrew Oster currently unaffiliated (previously with Sagepoint Financial (Osaic) and Securities America)
- Robert Edward Micone currently unaffiliated (previously with LPL Financial and Securities America)
- Wayne David Wagner Jr. currently unaffiliated (previously with Securities America and LPL Financial)
- John Allen Brown currently barred (previously with LPL Financial and Securities America)
- Robert Fross currently unaffiliated (previously with LPL Financial and Securities America)
- Shawn Michael Layton with LPL Financial (previously with Securities America Advisors and Securities America)
- Timothy Johnson with Securities America (previously with USAdvisors Wealth Management and Cetera Investment Advisers)
- Leah Anne Brooks with Private Client Services (previously with Gaddis Premier Wealth Advisors and Securities America)
- Jason Comes currently unaffiliated (previously with Cetera Advisor Networks and Securities America)
- Scott Barber with Securities America (previously with Securities America Advisors and Investacorp Advisory Services)
- Luann Chapmangatts with Securities America (previously with Securities America Advisors and LPL Financial)
- Jonathan Cummings with LPL Financial (previously with Securities America Advisors and Securities America)
- Antonio Reyna with Securities America (previously with Securities America Advisors and LPL Financial)
- Eugene Yelverton with LPL Financial (previously with Securities America Advisors and Securities America)
- Gary Barney with LPL Financial (previously with Securities America and The O.N. Equity Sales Company)
- Norman Coates with Securities America (previously with Securities America Advisors and LPL Financial)
- Andy Rampersaud with LPL Financial (previously with Securities America and Investacorp Advisory Services)
Did Misconduct By a Securities America Advisor Impact Your Investments?
If you have lost money investing with any of these Securities America advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call our legal team at Patil Law toll-free at 1-800-950-6553 or reach out to us via the secure and private online form for a free initial consultation.
Securities America Has Many Regulatory Complaints and Fines
There have been approximately fifty-six (56) state and self-regulatory body disclosure events against Securities America; that is, final and formal proceedings initiated by a regulatory authority like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been countless customer complaints filed against Securities America for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
Our legal team at Patil Law has reported and written about these regulatory problems and customer complaints over many years. A few of the notable FINRA Sanctions for its Supervisory Failures are below.
A Closer Look Into Securities America’s Regulatory Issues
Securities America has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. Details of fifty-six (56) regulatory issues are listed below:
Fined $122,845.59 for Alleged Supervisory Failures In Ensuring That All Eligible Customers Receive Applicable Sales Charge Waivers Or Special Share Classes (AWC No: 2021069460901)
Overview from FINRA’s Disciplinary Office:
From September 2015 to September 2020, Securities America, Royal Alliance, and SagePoint failed to establish and maintain a supervisory system reasonably designed to ensure that all eligible customers received applicable sales charge waivers or special share classes in connection with rolling over 529 plans from one state plan to another. Some customers who were eligible for these waivers or special share classes did not receive them. Therefore, Respondents violated MSRB Rule G-27.
As more fully described below, FINRA credits Respondents for their extraordinary cooperation. Accordingly, this AWC includes an undertaking to pay restitution totaling approximately $515,000 plus interest, and censures, but no fines.
Fined $100,000 for Alleged Supervisory Failures In Overseeing Recommendations Regarding An Alternative Mutual Fund (Docket/Case Number: 2019061765001)
Overview from FINRA’s Disciplinary Office:
Between August 17, 2016, and February 8, 2018, SAI failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM).1 SAI permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options. SAI also lacked a reasonable supervisory system to review representatives’ LJM recommendations. SAI representatives sold more than $616,000 in LJM to thirty-three customers. LJM’s value dropped 80% during an extreme volatility event in February 2018 and the fund ultimately liquidated and closed, resulting in hundreds of thousands in losses for SAI’s customers. By virtue of the foregoing, SAI violated FINRA Rules 3110 and 2010.
Fined $125,000 for Alleged Supervisory Failures Causing Representatives To Give Away Customers’ Personal Information Without Their Knowledge Or Consent (AWC No: 2019064323201)
Overview from FINRA’s Disciplinary Office:
Between November 2018 and September 2019, Securities America caused 12 registered representatives, whom the firm was recruiting, to take nonpublic personal customer information from the firms where the representatives were then registered and to disclose it to a third party without the other broker-dealers’ or the customers’ knowledge or consent, causing those broker-dealers to violate the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Information (Regulation S-P). As a result, Securities America violated FINRA Rule 2010.
Fined $175,000 for Alleged Supervisory Failures In Ensuring Compliance With Securities Laws And Regulations For Variable Annuity Recommendations (AWC No: 2016048243101)
Overview from FINRA’s Disciplinary Office:
Between August 4, 2014 and January 28, 2016 (the “Relevant Period”), SAl failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that representatives’ recommendations of variable annuities complied with applicable securities laws and regulations and FINRA Rules. As a result, SAI violated FINRA Rules 2330(d), and (e), NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on and after December 1, 2014) and FINRA Rule 2010.
Fined for Allegedly Disadvantaging Some Customers Who Were Eligible To Buy Class A Shares Without Front-End Sales Charge (AWC No: 2015047269801)
Overview from FINRA’s Disciplinary Office:
Between July 1, 2009. and July 1, 2015 (the ‘Relevant Period”), SAI disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a frontend sales charge ( ‘Eligible Customers’ ). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, SAI failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, SAI violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
Fined $250,000 for Alleged Supervisory Failures Allowing A Representative To Sell Csmif’s Preferred Notes Without Conducting Proper Due Diligence (AWC No: 2013036692002)
Overview from FINRA’s Disciplinary Office:
From March 2009 through July 2009 (the Relevant Time Period), SAI permitted one of its representatives, SH, to sell Preferred Notes of CSMIF (the “Preferred Notes”), a security, without the Firm first conducting adequate due diligence regarding this product, SAI’s approval of the Preferred Notes did not enforce with SAI’s own written supervisory procedures regarding due diligence. SAI’s conduct violated NASD Rules 3010 and FINRA Rule 2010.
Fined $275,000 for Allegedly Neglecting To Give Sales Charge Discounts To Eligible Customers’ Purchases Of Unit Investment Trusts (AWC No: 2014041679301)
Overview from FINRA’s Disciplinary Office:
From May 1, 2009 to April 30, 2014 (the “Relevant Period”), SAI failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (“UITs”) in violation of FINRA Rule 2010, In addition, SAI failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that customers received sales charge I discounts on all eligible UIT purchases in violation of NASD Rule 3010 and FINRA Rule 2010.
Fined $625,000 for Alleged Supervisory Failures Regarding Consolidated Report Usage By Its Representatives (AWC No: 2010025742201)
Overview from FINRA’s Disciplinary Office:
From January 1, 2007 through March 31, 2013, Securities America failed to establish, maintain, and enforce a reasonable supervisory system regarding the use of consolidated reports by its registered representatives. The Firm made a consolidated reporting system available to its registered representatives which allowed the representatives to enter customized values for assets and accounts held away from the Firm; however, the Firm did not have a satisfactory system to supervise the accuracy of valuations provided to the customers, in violation of NASD Rules 3010(a) and (b) and 2110 and FINRA Rule 2110. The Firm’s failure to adequately supervise the valuations used on the consolidated reports, resulted in inaccurate statements being sent to customers, in violation of NASD Rules 2210(d)(1) and 2110 and FINRA Rule 2010. The Firm also failed to retain some of the consolidated reports, in violation of Section 17 of the Securities Exchange Act of 1934 and SEC Rule 17a-4 thereunder; NASD Rules 3110, 3010(d)(3), and 2110, and FINRA Rules 4511 and 2010.
Fined $100,000 for Alleged Supervisory Failures In Supervising Electronic Communications With Customers (AWC No: 2010022518105)
Overview from FINRA’s Disciplinary Office:
From October 2007 through August 2008 (the “relevant period”), SAI failed to have a supervisory system, including written procedures, in place regarding electronic communications with customers that was reasonably designed to achieve compliance with applicable federal securities laws and regulations and with applicable FINRA and NASD Rules. SAI’s email monitoring system did not identify numerous emails sent to customers by three registered representatives working in a branch in Cleveland, Ohio, that contained misrepresentations or misleading statements relating to two private placements—IMH Secured Loan Fund, LLC (the “IMH Fund”) and Medical Provider Funding Corporation V (“Med Cap V”). Because SAI’s email monitoring system did not identify these emails, the emails were not reviewed by anyone at SAI, including supervisory personnel, to determine whether the emails contained statements that were inconsistent with applicable requirements. By failing to have a supervisory system, including written procedures, in place regarding electronic communications with customers that was reasonably designed to achieve compliance with applicable with applicable securities laws and regulations and with applicable FINRA and NASD Rules, SAI violated NASD Rules 3010(a), 3010(d)(2), and NASD Rule 2110.
Fined for Alleged Supervisory Failures In Conducting Proper Product Due Diligence (AWC No: 2010022518101)
Overview from FINRA’s Disciplinary Office:
Securities America, Inc. (i) failed to conduct adequate product due diligence on the Shale Royalties 15, Inc. and Shale Royalties 20, Inc. private placements offered by Provident Royalties, LLC pursuant to Regulation D sufficient to have reasonable grounds to believe that the offerings were suitable for any customer; and (ii) failed to enforce a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations and NASD and FINRA Rules in connection with approving the sale of these two private placements. Accordingly, Securities America, Inc. violated NASD Conduct Rules 2310,3010 and 2110 and FINRA Rule 2010.
Fined $55,000 For Allegedly Neglecting To Accurately Conduct A Self-Assessment Of Breakpoint Compliance (AWC No: 2005001164501)
Overview from FINRA’s Disciplinary Office:
NASD Rule 2110: The breakpoint self-assessment follow-up review conducted for the firm found that the firm failed to accurately complete the self-assessment of breakpoint compliance and did not identify and review all qualifying mutual fund transactions to determine whether remedial action was necessary. The firm did not accurately complete the required trade-by-trade review as part of the remediation process following the self-assessment.
Fined $322,000 for Alleged Supervisory Failures (AWC No: EAF0401370002)
Overview from FINRA’s Disciplinary Office:
This matter arises from a review of SAI’s sales of Class B and Class C shares of mutual funds between January 1, 2003 and July 31, 2004 (the “review period”). Within the review period SAI effected transactions where it made recommendations to clients to purchase Class B and Class C shares through its registered representatives. In connection with its recommendations, SAI did not consider on a consistent basis that an equal investment in Class A shares would generally have been more advantageous for certain clients. Accordingly, SAI will undertake a remediation plan that includes more than 2,900 transactions involving at least 266 client households.
In particular, the Firm did not consider that large investments in Class A shares of mutual funds entitle clients to breakpoint discounts on sales charges, generally beginning at the $50,000 investment level, which are not available for investments in Class B and Class C shares. In fact, clients may be entitled to breakpoints based upon a single mutual fund purchase, multiple purchases in the same “family of funds” and/or mutual fund investments held, at the time of the new purchase, by members of the client’s “household,” as that term is defined in the prospectus of the fund in which the shares are being purchased. Unlike Class A shares. Class B shares are subject to contingent deferred sales charges (“CDSCs”) for a period of time, generally six years, as well as higher ongoing Rule 12b-l fees for as long as the Class B shares are held. The CDSCs and the higher ongoing Rule 12b-l fees significantly affect the return on clients’ mutual fund investments.
In addition, SAI’s supervisory and compliance policies and procedures during the review period were not reasonably established, maintained and/or enforced so that the Firm, at the point of each sale, provided consideration to, on a consistent basis, the benefits of the various mutual fund share classes as they applied to individual clients.
As a result of the foregoing, SAI violated NASD Conduct Rules 2110, 2310, and 3010.
Fined $375,000 for Alleged Supervisory Failures In Making Sure Representative Appropriately Disclosed Information From A Fund Company (AWC No: 2005003437101)
Overview from FINRA’s Disciplinary Office:
At all relevant times herein, MB, a former SAI representative, provided financial services for the retirement plans of labor unions. Among other things, he recommended that his clients select or maintain specific mutual funds for the investment menu available to plan participants. In or about January 2002, MB and a certain mutual fund company (“Fund Company”) negotiated a directed commission arrangement that provided MB with additional compensation in order to fund the hiring of a sales assistant. SAI approved MB’s arrangement with Fund Company, and in 2002 and 2003 SAI received $420,000 in directed commissions for MB’s benefit. SAI paid MB $262,500 out of these directed commissions and retained $157,500. This arrangement, and these payments, violated restrictions placed on the use of directed brokerage commissions set forth in NASD Rules 2830(k)(7) and 2830(k)(4).
During the time he was receiving directed commissions, all but one of MB’s clients included at least one mutual fund from Fund Company. When MB recommended that certain of his clients include or maintain Fund Company mutual funds in their plan investment menus, he failed to disclose that he was receiving substantial additional compensation from Fund Company and, on at least two occasions, inaccurately represented his remuneration in communications with clients. SAI failed to take steps to ensure that MB describe and disclose to his customers the receipt of this additional compensation from Fund Company, despite its awareness and ratification of the directed commission arrangement that resulted in MB’s conflict;and, on at least three other occasions, including as late as 2006 and 2007, SAI failed to detect and prevent other misleading communications by MB concerning his arrangement and the NASD investigation, including in one instance approving one of the misleading communications, thereby violating its duty to supervise contained in Rule 3010(a).
Fined $250,000 for Alleged Supervisory Failures Allowing Representative to Engage In Discretionary Trading (AWC No: 2005001520702)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 2510, 3010(A) – Securities America, Inc. failed and neglected to establish a system reasonably designed to supervise the activities of a registered representative whose discretionary trading and subsequent losses to investors appeared in the firm’s exception reports but provided no coordinated response until a customer complaint was filed a year later. The firm failed to review all discretionary accounts at frequent intervals in connection with the transactions effected by the representative in order to detect and prevent transactions that were excessive in size or frequency in view of the financial resources and character of the account.
Fined $225,000 for Alleged Supervisory Failures In Complying With Applicable Securities Laws and Regulations With Respect To Its Annuity Exchange Business (AWC No: EAF0400600003)
Overview from FINRA’s Disciplinary Office:
During the review period, January 1, 2003, to October 31, 2004, SAI violated NASD Conduct Rules 3010 and 2110 by failing to establish and maintain an adequate supervisory system, including written procedures, reasonably designed to achieve compliance with applicable securities laws and regulations, and with the applicable Rules of the NASD with respect to its variable annuity exchange business.
First, SAI’s written supervisory procedures were inadequate. Its Compliance Manual was outdated and failed to reflect the current electronic monitoring system in use at the firm. The Trade Review Team (“TRT”), a group within the Compliance Department at the home office, reviewed SAI’s variable annuity exchanges. Among other things, TRT relied on a section of the firm’s WSPs, referred to as the “Variable Product Guidelines” (“Guidelines”) to provide guidance on how to evaluate a proposed exchange for suitability. But the Guidelines failed to provide adequate guidance to individuals reviewing exchanges. For example, the Guidelines required that an exchange transaction must be “in the best interest of and [be] suitable for the client.” But they did not provide guidance on how this standard was to be applied. In addition, the Guidelines mandated that TRT undertake a “further review” in certain circumstances, but failed to describe what that “further review” should entail.
Second, SAI’s supervisory system was inadequate, primarily due to the firm’s failure to properly implement its system and procedures and adequately document the conduct of the same. Certain transactions that required “further review” were riot adequately reviewed and, to the extent such review occurred, no documentation of such review was maintained. In addition, SAI requested that TRT track frequent replacements by representatives, but it did not give TRT sufficient tools to do so.
In light of these and other supervisory deficiencies relating to variable annuity exchanges, SAI violated NASD Rules 3010 and 2110.
Fined $2,500,000 for Alleged Supervisory Failures Allowing Representative To Make Misleading And Unwarranted Written And Oral Representations (AWC No: 2005000226002)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 2210(C)(1), 2210(D)(1), 2510, 3010(A) and (B): respondent member firm allowed the representative to operate without adequate supervision, when they knew, or should have known, that the representative was making misleading and unwarranted written and oral representations that customers could establish monthly withdrawal programs based on high rates of return, and was encouraging customers to retire early from their jobs on the expectation of high rates of return without adequate disclosure of the risks associated with seeking such returns. The representative also prepared and distributed his own form of customer statements annotated with misleading notations. The firm objected to the form of statements, but allowed the representative to use them for a period of time after he agreed to indemnify the firm. The firm failed to approve promptly in writing each discretionary order entered and to review all discretionary accounts in order to detect and prevent transactions which were excessive in size or frequency in view of the financial resources and character of the account. The firm failed to file with NASD advertising certain of its representatives advertising and sales literature that contained communications relating to investment companies, which were not fair and balanced and omitted material facts. The firm supervisory procedures with respect to its registered representatives were not adequately enforced at all times.
Fined $10,000 for Alleged Supervisory Failures In Reporting Correct Price For Transactions (AWC No: 2005002010101)
Overview from FINRA’s Disciplinary Office:
MSRB Rules G-14, G-27 – Securities America, Inc. failed to report to the MSRB the correct price for transactions; and failed to enforce its written supervisory procedures that specified that all municipal securities transactions would be approved, evidenced by his/her initials or signature on all appropriate documents.
Fined $2,400,000 for Allegedly Operating A Revenue Sharing Program Wherein Mutual Fund Complexes Paid A Fee For Preferential Treatment (AWC No: CE4050008)
Overview from FINRA’s Disciplinary Office:
This matter involves violations of NASD Conduct Rule 2830(k), which prohibits member firms from favoring or disfavoring the sale or distribution of mutual fund shares on the basis of brokerage commissions received by the firm, prohibits member firms from arranging for a specific amount or percentage of brokerage commissions to be directed to the firm conditioned on the firm’s sale of mutual fund shares, and prohibits member firms from recommending the purchase of mutual fund shares on the basis of brokerage commissions received or expected to be received by the firm from any source.
From January 2001 through December 2003 (the “Relevant Period”), SAI maintained a revenue sharing (shelf space) program known as the Premier Partner Program. Participating mutual fund complexes paid a fee in return for preferential treatment, which included enhanced access to the firm’s sales force and highlighted treatment on SAI’s recommended list and its website. Eight of the fund complexes that participated in SAI’s revenue sharing program paid their fees, in part, by directing over $7.9 million in brokerage commissions to SAI. SAI’s receipt of these commission payments violated NASD Conduct Rules 2830(k) and 2110.
Fined $20,000 for Allegedly Recommending Unsuitable BDCA Securities (Docket/Case Number: SEC-2021-00008)
Overview from FINRA’s Disciplinary Office:
SAI recommended the purchase of unsuitable BDCA Securities to the client based on factors such as age, investment objective, and time horizon. SAI failed to supervise the activities of its broker-dealer agent in connection with the client’s purchase of the BDCA shares.
Fined $500 for Alleged Supervisory Failures In Notifying About Its Changed Address On Time (Docket/Case Number: 3468-2017 / 161137)
Overview from FINRA’s Disciplinary Office:
The Department alleged that the firm violated Title 18 of the Delaware code by failing to notify the commissioner of the firm’s address change within 13 days.
Fined $2,000 for Allegedly Maintaining An Unlicensed Branch Office (Docket/Case Number: INV17-161)
Overview from FINRA’s Disciplinary Office:
Violation of NRS 90.360(2) and NAC 90.392 by maintaining an unlicensed branch office during the period of July 18, 2017 through January 18, 2018.
Fined $30,000 for Alleged Supervisory Failures Allowing Clients To Purchase REIT Investments Exceeding The Firm’s Concentration Limit Guidelines (Docket/Case Number: 57195-S)
Overview from FINRA’s Disciplinary Office:
Florida alleged that during the period of January 1, 2012 through March 20, 2014, 1) the firm allowed 3 clients to purchase REIT investments that exceeded the firm’s concentration limit guidelines without adequate explanation as to why these transactions met the exception to the firm’s guidelines and 2) approximately one month after implementing required REIT training, the firm did not require one registered representative to complete a REIT training course pertaining to one REIT transaction.
Fined $1,000 for Alleged Supervisory Failures In Reporting Administrative Actions On Time (Docket/Case Number: ASD File #43415)
Overview from FINRA’s Disciplinary Office:
The North Carolina Department of Insurance alleged that the firm violated the State’s Insurance Regulations by its failure to timely report two administrative actions between the years 2012-2015 and by failing to disclose an administrative proceeding on its renewal application for years 2014-2016.
Fined $30,000 for Allegedly Making Unsuitable Recommendations Regarding Client Purchase
Overview from FINRA’s Disciplinary Office:
Allegations include making unsuitable recommendations to a client to purchase and continue to hold non-traditional exchange traded funds and failure to supervise a registered representative in connection with the representative’s recommendation that clients purchase and continue to hold non-traditional exchange traded funds.
Fined $2,000 for Alleged Supervisory Failures In Reporting Administrative Actions On Time (Docket/Case Number: 14388-AG16-0419-098)
Overview from FINRA’s Disciplinary Office:
The Indiana Department of Insurance alleged that the firm violated the State’s insurance regulations by its failure to timely report several administrative actions between the years of 2005 and 2015.
Fined $2,500 for Allegedly Maintaining Branch Office Locations Without License (Docket/Case Number: CI14-104-MCF)
Overview from FINRA’s Disciplinary Office:
The State of Nevada Office of The Secretary of State Securities Division alleged that the firm maintained three branch office locations in the State of Nevada without obtaining a license from the Securities Division.
Fined $250 for Alleged Supervisory Failures In Reporting Administrative Actions On Time (Docket/Case Number: LA DOI)
Overview from FINRA’s Disciplinary Office:
The Louisiana Department of Insurance alleged that the FINRA Administrative action dated October 19, 2015, was not reported to the Louisiana Department of Insurance within thirty days.
Fined $70,000 for Alleged Supervisory Failures In Overseeing Associated Persons (Docket/Case Number: S-14-0003)
Overview from FINRA’s Disciplinary Office:
Failure to maintain and enforce written procedures; suitability; failure to diligently supervise its associated persons.
Fined $125,000 for Allegedly Engaging In Dishonest and Misleading Radio Advertising Campaign
Overview from FINRA’s Disciplinary Office:
Respondent engaged in a dishonest and misleading radio advertising campaign in violation of the Massachusetts Uniform Securities Act.
Fined $150,000 for Allegedly Selling Non-Traded REITs (Docket/Case Number: E-2013-0048)
Overview from FINRA’s Disciplinary Office:
Securities America, through its registered representatives, sold non-traded REITs in excess of Massachusetts heightened concentration limits imposed by the prospectus.
Fined for Allegedly Engaging In Sale of Fraudulent And Unregistered Promissory Notes
Overview from FINRA’s Disciplinary Office:
On April 19, 2013, the State of North Dakota Securities Commissioner issued a charging order to Securities America, Inc. (SAI) relating to the actions of former representative Larry Atkins. Atkins was affiliated with SAI from October 28, 1994 to May 30, 1997. The State of North Dakota Securities Commissioner Alleges that during his affiliation with SAI, Atkins entered into at least 13 transactions involving the sale of fraudulent, unregistered promissory notes in violation of N.D.C.C. 10-04-04, 10-04-10(2) and 10-04-15. The State of North Dakota Securities Commissioner is requesting that SAI rescind the transactions for the full amount paid for the securities, plus statutory interest, less the amount of any income received by the investors, pursuant to provisions of N.D.C.C. 10-04-16(1) and 10-04-17. Alternatively, the Commissioner seeks to impose penalties.
Fined $500 for Alleged Supervisory Failures In Reporting An Administrative Action (Docket/Case Number: A-1962)
Overview from FINRA’s Disciplinary Office:
Securities America, Inc. failed to report a 2008 administrative action taken by the Nebraska Department of Banking and Finance to the director of the Nebraska Department of Insurance within 30 days of the final disposition of the administrative action.
Fined $4,000 for Alleged Supervisory Failures In Overseeing A Situation (Docket/Case Number: SD-12-0025)
Overview from FINRA’s Disciplinary Office:
The Division alleged respondent failed to reasonably supervise, warranting sanctions under Section 61-1-6(2)(A)(II)(J) of the Utah Uniforms Securities Act.
Fined $25,000 for Allegedly Selling Unsuitable Medical Capital Notes (Docket/Case Number: INV2010-019)
Overview from FINRA’s Disciplinary Office:
Securities America entered into contracts with Medical Capital Holdings Inc. from 2004 to 2008 for the sale of medical capital notes. The sales in NH of these notes were private placements that were not suitable for the NH investors. The notes went into default causing investor losses.
Fined $500 for Alleged Supervisory Failures In Filing Annual Report By Broker of Viatical Settlements (Docket/Case Number: 11.0440)
Overview from FINRA’s Disciplinary Office:
The State of Nevada Department of Business and Industry Division of Insurance alleged that Securities America, Inc. (SAI) failed to file an annual report by broker of viatical settlements in 2007 as required by NRS 688C.510.
Fined $10,000 for Alleged Supervisory Failures Allowing Representatives To Share Client Information To An Unauthorized Third Party (Docket/Case Number: 11-0054 CA)
Overview from FINRA’s Disciplinary Office:
The State of Indiana Secretary of State Securities Division alleged that a representative of Securities America, Inc. (SAI) supplied information concerning the identity, affairs, or investments of a client to an unauthorized third party and exercised discretionary power in placing an order for the purchase or sale of securities for a client without obtaining authority to do so.
Fined $45,000 for Allegedly Engaging in Fraudulent Activities (Docket/Case Number: SEC-2010-48)
Overview from FINRA’s Disciplinary Office:
Fraud by omission; fraud by engaging in an act, practice or course of business that operates or would operate as a fraud or deceit.
Fined for Allegedly Sold Notes Totaling Approximately $7.2 Million To Over 60 Massachusetts Investors (Docket/Case Number: E-2009-0085)
Overview from FINRA’s Disciplinary Office:
Medical Capital issued over 1.7 billion dollars in promissory notes (“MC notes”) from 2003 to 2009. Respondent acted as a placement agent in connection with the sale of 697 million dollars worth of MC notes. Respondent sold notes to over 60 Massachusetts investors who purchased roughly 7.2 million dollars of MC notes. In connection with these sales, respondent received over 26 million dollars in compensation and respondent’s top executives enjoyed vacation trips which were paid by Medical Capital. Since August 2008, Medical Capital has defaulted on all of its outstanding note obligations. Currently, 1.079 billion dollars of MC notes are in default status, of which 358 million dollars were sold by respondent. Investors were told by respondent that MC notes were “fully secured” but material risk information which would have made clear to investors the high risk associated with the MC notes was kept hidden from them. Respondent’s registered representatives circulated marketing materials to investors for the purpose of soliciting sales of MC notes without first ensuring that each investor was sophisticated and accredited. Respondent ignored contents in due diligence analyst reports which recommended that investors be informed of material risks associated with MC notes.
Fined $2,500 for Alleged Supervisory Failures In Properly Disclosing Outside Business of Representatives
Overview from FINRA’s Disciplinary Office:
State of Nebraska has determined that SAI has violated State rules Neb. Rev. 8-1103 for failing to properly disclose outside business of its representatives under section 13 of form U4. SAI allows its representatives to list outside business such as fixed insurance activities under Section 12, Section 13 or both of Form U4.
Fined $7,500 for Alleged Supervisory Failures In Reporting Transactions in TRACE-Eligible Securities (Docket/Case Number: 20050032151-01)
Overview from FINRA’s Disciplinary Office:
NASD Rules 6230(A), 6230(C)(8) – Securities America, Inc. failed to report to the Trade Reporting and Compliance Engine (TRACE) transactions in TRACE-eligible securities executed on a business day during TRACE system hours within 15 minutes of the time of execution. The firm failed to report to TRACE the correct time of trade execution for transactions in TRACE-eligible securities.
Fined $10,000 for Alleged Supervisory Failures In Complying With The Branch Representative Registration Provisions (Docket/Case Number: 105-231-DB)
Overview from FINRA’s Disciplinary Office:
In a letter of acceptance, waiver and consent SAI stipulated that it failed to comply with the branch and representative registration provisions of NAC 90.3945, NAC 90.355, and NRS 90.310.
Fined $20,000 for Allegedly Operating Two Branch Offices Without Benefit of Registration (Docket/Case Number: 0219-S-7/05)
Overview from FINRA’s Disciplinary Office:
Operating two branch offices without the benefit of registration in Florida.
Fined $10,000 for Alleged Supervisory Failures Allowing Representative To Engage In The Sale Of Non-Existent Arbitrage And Hedge Investments (Docket/Case Number: CO-00-6055-S)
Overview from FINRA’s Disciplinary Office:
Failure to supervise Boutrous Mansour who violated firm policies regarding his sale of non-existent arbitrage and hedge investments.
Fined $10,000 for Alleged Supervisory Failures In Overseeing Representatives (Docket/Case Number: C3B980004)
Overview from FINRA’s Disciplinary Office:
Alleging violations of NASD Rules 2110 and 3010
Fined $20,000 for Alleged Supervisory Failures Regarding Unregistered Activities (Docket/Case Number: 2850-S-8/99)
Overview from FINRA’s Disciplinary Office:
Unregistered activity, failure to enforce supervisory procedures.
Fined $5,000 for Alleged Supervisory Failures In Detecting Sales by An Unregistered Sales Person (Docket/Case Number: SEU-92-011)
Overview from FINRA’s Disciplinary Office:
Failure to detect sales by an unregistered sales person.
Fined $7,500 for Allegedly Conducting Business Without Being Properly Appoined (Docket/Case Number: C 099-05-006)
Overview from FINRA’s Disciplinary Office:
Conducting insurance related business without being properly appointed in violation of the Pennsylvania Insurance Department Act.
Fined $5,000 for Allegedly Operating An Unregistered Branch Office (Docket/Case Number: 1970-S-12/93)
Overview from FINRA’s Disciplinary Office:
Operation of an unregistered branch office and violations of Chapter 517 of the Florida Administrative Code.
Fined $50,000 for Alleged Supervisory Failures In Detecting And Preventing Unsuitable Trading Activity Conduct (Docket/Case Number: C07990026)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110 and 3010 – respondent member failed to establish adequate written supervisory procedures to detect and prevent the sort of unsuitable trading activity conduct by an individual in the accounts of public customers, and failed to adequately supervise the individual in that the actions taken by respondent member were insufficient to detect or prevent the individual’s unsuitable trading activity.
Fined for Alleged Supervisory Failures In Overseeing Statements and Fraudulent Activities (Docket/Case Number: XY 97-02)
Overview from FINRA’s Disciplinary Office:
Lack of supervision.
Fined $10,000 for Alleged Supervisory Failures In Overseeing Members (Docket/Case Number: C3B980023)
Overview from FINRA’s Disciplinary Office:
Violations; NASD Rules 2110 and 3010
Fined $10,000 for Alleged Supervisory Failures In Complying With NASD Rules (Docket/Case Number: C3B920025)
Overview from FINRA’s Disciplinary Office:
Alleging violations of Article III, Sections 1, 27, 35(B)(1), 35(B)(1), 35(D)(1)(A), (B), (C) and 36(B)(1) of the rules of fair practice in that respondent Tummino distributed to customers and to the public A sales brochure that failed to disclose material facts, made exaggerated, unwarranted or misleading statements or claims, and made promises of specific results and forecasts of future events; distributed the aforementioned material when it was not approved by a registered principal of his member firm and respondent Zielinski permitted respondent Tummino to distribute this sales literature which he had not reviewed and for which he was not given written approval; and respondents member and Zielinski failed to establish, maintain and enforce adequate written supervisory procedures or otherwise failed to adequately supervise the activities of registered representatives of the firm to ensure compliance with applicable NASD rules.
Fined $1,000 for Alleged Supervisory Failures In Notifying The Commission Of Agents’ Settlement Order (Docket/Case Number: SEC940009)
Overview from FINRA’s Disciplinary Office:
Failed to comply with Commission’s Securities Act Rules 300 A&B, as firm failed to notify Commission that two agent’s had entered into settlement order with the State of Hawaii.
Fined $2,500 for Alleged Misrepresentations of Material Facts (Docket/Case Number: SO 0127)
Overview from FINRA’s Disciplinary Office:
Misrepresentations of material facts/censure and civil penalty of $2,500 PAR
Fined $2,000 for Allegedly Selling Unregistered Securities (Docket/Case Number: O-92-0020)
Overview from FINRA’s Disciplinary Office:
Sale of unregistered securities
Fined $5,000 for Alleged Supervisory Failures In Overseeing Representatives and Their Transactions (Docket/Case Number: C8A920099)
Overview from FINRA’s Disciplinary Office:
Violations of Article III, Sections 1, 2, 18, 27 and 40 of the Rules of Fair Practice in that respondent Gale participated in private securities transactions while failing to notify her member firm of her intention to engage in such activities and/or obtain written approval from her member firm to engage in such activities; induced the purchase of stock by public customers by means of deceptive or fraudulent devices or contrivances; and, recommended to public customers the purchase of securities without having reasonable grounds for believing such recommendations were suitable for the customers; respondent member, acting through respondents Pierce and Wild, failed to establish, maintain, and/or enforce written supervisory procedures or to otherwise supervise the activities of respondents Meredith and Gale properly; and respondent member, acting through respondent Meredith, failed to enforce the firm’s written supervisory procedures properly or to otherwise supervise the activities of respondent Gale properly.
Next Steps and Free Consultation with Our Legal Team
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Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date. We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money.
We can help you, as we have helped hundreds of other clients in the past. We are happy to serve you as well as to provide you with a custom report of your advisor’s and your brokerage firm’s complaints.