WFG Is Fined $700,000 for Supervision Failures
From the Desk of Jim Eccleston at Eccleston Law Offices:
FINRA has fined WFG Investment Inc. $700,000 for failing to commit the time, attention and resources to a range of critical obligations in its supervision of registered reps.
WFG is a midsized independent broker-dealer based in Dallas with 280 independent registered reps.
According to FINRA, WFG has failed in half a dozen areas of supervision. Examples include WFG’s failing to conduct appropriate due diligence and supervision with respect to a private placement offering that was sold by a registered rep away from the firm.
As another example, from March 2007 to January 2014, WFG failed to supervise the private securities transactions of ones of its reps that were executed through the rep's RIA, and also failed to maintain an adequate supervisory system to ensure that transactions for the customer were suitable.
As a third example, between August 2012 and July 2013, WFG failed to supervise a rep's sale of alternative investments. It granted one of its reps a “blanket waiver” from compliance with the firm's written supervisory procedures with respect to the sale of alternative investments, including real estate investment trusts and private equity. That led several of the rep's customers to invest more than 25% of their liquid net worth in various alternative investments, while some even invested more than 90%.
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