FINRA Fines Newbridge Securities $105,000 for Failing to Supervise Margin Trading

Posted on March 6th, 2025 at 11:28 AM
FINRA Fines Newbridge Securities $105,000 for Failing to Supervise Margin Trading

From the desk of Jim Eccleston at Eccleston Law

Newbridge Securities Corp., an independent broker-dealer based in Boca Raton, Florida, has agreed to pay a $105,000 penalty for failing to supervise financial advisors who recommended margin trading to clients. According to a settlement with FINRA, Newbridge accepted the findings without admitting or denying them.

FINRA found that from July 2015 to June 2020, Newbridge failed to properly oversee two representatives who recommended margin trading in five customer accounts. InvestmentNews reports that the affected clients were not sophisticated investors and did not fully understand the risks and costs of margin trading.

Margin trading allows investors to buy more securities than they could with cash alone, increasing potential profits but also heightening risks. The practice can also generate higher commissions for advisors due to increased trading volume.

As part of the settlement, Newbridge agreed to pay a $60,000 fine and $45,000 in restitution, plus interest. This latest sanction adds to Newbridge’s history of regulatory infractions.

In September 2023, FINRA fined the firm $168,000 for failing to comply with anti-money laundering protocols related to a 2019 small-cap IPO of a China-based company. In 2019, FINRA imposed a $225,000 penalty for supervisory failures concerning the sale of complex securities, including structured notes and non-traditional exchange-traded funds. More recently, in March 2023, the firm paid a $50,000 fine and $114,000 in restitution for failing to supervise alternative mutual fund sales.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

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