NEXT Financial Group Investigation
September 2021-Houston, TX
Houston-based NEXT Financial Group discloses 26 prior regulatory events, according to FINRA records.
These regulatory sanctions include:
- July 2021-FINRA censured NEXT and assessed a fine of $750,000 to resolve allegations that the firm’s supervisory procedures were inadequate and did not prevent unsuitable short term trading in mutual funds and municipal bonds and the over concentration of Puerto Rican bonds. In one instance, cited by FINRA, a customer incurred unnecessary sales charges of $925,000 and suffered losses of $4.1 million.
- February 2020– Texas regulators fined NEXT $100,000 to resolve allegations that the firm allowed an agent to use a short term trading strategy in class A mutual funds and failed to enforce its written supervisory procedures.
- December 2019-New Hampshire regulators fined NEXT $235,000 to resolve allegations that NEXT approved the sale of Non-Traded REITs that exceeded concentration guidelines, and made unsuitable recommendations including sales to a client over the age of 80.
- December 2019-Massachusetts regulators fined NEXT $150,000 for failing to supervise an agent that over concentrated customers in Non Traded REITs.
- December 2017FINRA for various deficiencies in its supervisory procedures over one of its brokers in FINRA Letter of Acceptance Waiver and Consent No. 20155043319901. FINRA fined NEXT Financial Group $750,000, issued a censure and required NEXT to hire an Independent Consultant to conduct a comprehensive review of its supervisory system.
- Those supervisory deficiencies include:
- A failure to implement a system reasonably designed to detect excessive trading (“churning”).
- NEXT’s systemic failures in the supervision of the sales of variable annuities (VA). The sale of variable annuities earned NEXT over $219 million, 27% of its revenues, from July 2012-April 2014.
- Failures in supervising the preparation and dissemination of consolidated reports from brokers to customers which allowed brokers to manually enter and value assets held away from the firm without providing supporting documentation to show the existence and value of the assets.
- Misleading information on the company’s website and the omission of material facts relating to compensation received by NEXT from financial partners supplying investment products to NEXT.
The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.
Several NEXT Financial Group brokers have been accused of converting customer funds in recent years. See this for more detail on NEXT Financial Group brokers alleged to have wrongfully taken funds from customer accounts.
Customers of NEXT Financial Group who have questions about how their account has been handled should contact us to discuss your legal options. If you have suffered losses in your account, you may be able to recover damages through FINRA arbitration.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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