The Financial Industry Regulatory Authority (“FNIRA”) levied sanctions against Newbridge Securities Corporation (CRD#: 104065, Boca Raton, Florida) on September 26, 2019 for failing to supervise sales of non-traditional exchange-traded funds and structured products, and for making unsuitable recommendations about private placements. Evidently, the securities firm entered into a Letter of Acceptance, Waiver and Consent (“the AWC”). This AWC confirms FINRA’s imposition of a $250,000 fine and censure for violating FINRA and NASD rules. Here’s more on the disciplinary action:

Newbridge Fails To Supervise Suitability Of Structured Products

FINRA says that Newbridge violated NASD and FINRA rules for failing to supervise structured products transactions from 2013 to 2015. FINRA indicated that those structured products are debt securities typically based on one or more securities, indexes or currencies. The products are often comprised of a note and derivative. Notably, Newbridge apparently offered certain structured products including steepeners. Those products did not provide full principal protection and therefore contained more risk for investors.

Apparently, Newbridge securities brokers sold $96,900,000 in structured products to 976 clients. Evidently, clients placed $54,900,000 in non-principal protected notes. Supposedly, Newbridge did not establish supervisory systems or procedures to ensure it followed suitability guidelines on non-principal protected notes. Allegedly, Newbridge’s supervisory structure did not ensure that principals reviewed securities brokers’ recommendations against structured product profiles. Those profiles set forth suitability criteria, and restricted solicitations to clients of certain ages. Not only that, but the AWC stated that in Newbridge’s Syosset New York offices, none of the firm’s supervisors reviewed $26,000,000 in structured notes transactions for suitability compliance.

Newbridge Fails To Supervise Suitability Of Non-Traditional ETFs

Also, Newbridge apparently failed to supervise solicited sales of non-traditional ETFs. Non-traditional ETFs generally try to return a multiple of an underlying index or benchmark, or the inverse of the index or benchmark, in one trading session. Evidently, Newbridge prohibited non-traditional ETF sales between July 2013 and June 2016. However, the firm did not enforce its ban of non-traditional ETF sales. Indeed, Newbridge did not detect 95 prohibited transactions, and it failed to review securities brokers’ recommendations. Supposedly, about two-thirds of the sales resulted in investors holding the non-traditional ETFs for longer than what was appropriate. Indeed, some investors held products for more than 2 years when those investments were meant to achieve objectives on a daily basis.

Newbridge Fails To Supervise CJS Technology Select Fund LLC 1 Private Placement Sales

FINRA says that Newbridge also failed to supervise private placement sales for compliance with securities laws and FINRA rules. Allegedly, Newbridge had unreasonable written supervisory procedures regarding private placement recommendations mainly because of the failure of those procedures to address how to conduct due diligence. Apparently, the procedures only mentioned that Bruce Jordan would conduct due diligence.

The AWC reports that Newbridge was the placement agent for a CJS Fund I offering. Supposedly, this offering acquired 2 entities’ shares of a fund through purchase and sale agreements in return for the entities purchasing another fund’s units. Supposedly, that other fund supposedly owned pre-IPO shares in Uber and Lyft. Newbridge apparently recommended for 80 investors to buy $5,800,000 in CJS Fund I.

FINRA says that Newbridge and Bruce Jordan violated FINRA Rules because of not undertaking due diligence on CJS Fund I. Also, Newbridge did not verify information about ownership, pricing of pre-IPO shares, and whether there were excessive markups in the purchase and sale agreements. Because of this, FINRA says that Newbridge recommended CJS Fund I investments without any reasonable basis to believe recommendations were suitable for investors.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

Have you sustained losses by investing in structured products, non-traditional ETFs and private placements through Newbridge Securities Corporation? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and brokerage firms.