Category Archives: Undisclosed compensation

Summit Brokerage Services Sanctioned for Churning Accounts-Boca Raton, FL

July 2019-Boca Raton, FL

Summit Brokerage Services, an independent broker dealer headquartered in Boca Raton, FL, announced that it will close it doors and roll its business up into an affiliated broker dealer, Cetera Advisor Network.

Summit Brokerage reports having 450 advisors and $17.5 billion in client assets.

According to FINRA records, Summit Brokerage discloses 15 prior regulatory matters. Most recently in July 2019, Summit Brokerage was censured by FINRA, fined $325,000 and ordered to pay restitution to customers of $558,296, plus interest, to resolve various allegations related to supervision of the firm’s brokers. The supervisory deficiencies include a broker who excessively traded customer accounts which generated over $650,000 in commissions.

If you have losses in an account at Summit Brokerage Services, call for a no charge consultation to discuss your options.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Kestra Investment Services Assessed Regulatory Fine Over Mutual Fund Sales-Austin, TX

February 2019 – Austin, Texas

FINRA recently sanctioned Austin-based Kestra Investment Services (formerly NFP Advisor Services) for over charging more than 3,000 who qualified for waiver of front end sales fees on certain mutual fund purchase.

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.

According to the Letter of Acceptance, Waiver and Consent #2016048404601 recently entered into by Kestra, FINRA alleged that from July 2009-February 2018, Kestra disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in mutual funds without a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.

As a result Kestra violated NASD Conduct Rule 3010, FINRA Rules 3010 and 2010.

FINRA censured Kestra and assessed a regulatory fine of $225,000. In addition Kestra agreed to provide remediation to eligible customers on or before March 31, 2019.

If you have questions about an account with Kestra Investment Services , contact us for a no charge consultation to discuss how you may be able to recover damages for those losses.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

NEXT Financial Group Fined $750K by Securities Regulator-Houston, Texas

January 2018-Houston, Texas

Houston-based NEXT  Financial Group recently was sanctioned by FINRA 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.

The official records for NEXT Financial Group maintained on the FINRA website disclose that NEXT has been the subject of 19 prior regulatory events.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

William Blair and Company to Pay $4.5 Million Fine to Regulator

MAY 2017

According to the U.S. Securities and Exchange Commission, Chicago based brokerage firm William Blair and Company will pay $4.5 million to settle charges that mutual fund assets were used to pay for the distribution and marketing of fund shares outside of a Rule 12b-1 plan and that the firm failed to disclose it would retain a fee for providing shareholder administrative services to certain funds.

Link to SEC release

The payment errors cost the funds $1.25 million, which William Blair has repaid with interest.

FINRA records disclose that WIlliam Blair and Company has 25 prior regulatory events. The company has been a FINRA member since 1944.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Berthel Fisher & Broker Jeffrey Dragon Named in FINRA Complaint for Overcharging Commissons

April 2017-Burlington, MA

Berthel Fisher & Company and one of their brokers Jeffrey P. Dragon were named in a FINRA complaint alleging that Dragon generated more than $421,000 in concessions for himself and the firm, at the expense of customers, by recommending and effecting a pattern of unsuitable short-term trading of Unit Investment Trusts (UITs).

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.

The FINRA complaint further alleges that by failing to apply sales charge discounts from 2010-2014, more than 2700 customers did not receive applicable sales charge discounts resulting in excessive charges of about $667,000.

Berthel Fisher, which has about 350 brokers in 230 branch offices, was fined over $700,000 by FINRA 3 years ago for various failures in supervision related to sales of real estate investment trusts and leveraged exchange-traded funds from 2008-2012. Follow this link to review their FINRA record. 

Jeffrey Dragon was discharged by Berthel Fisher in 9/2016. The company made the following allegation in connection with his termination: “The firm believes that the representative did not adhere to a term of his heightened supervisions agreement, which required him to run all business, including fixed indexed annuities, through the firm’s commission grid.” Link to Dragon’s FINRA record. 

Investors who suffered losses on purchases of UITs, REITs or other investments in an account at Berthel Fisher 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870