The Financial Industry Regulatory Authority Inc, also known as FINRA, has fined two firms, Triad Advisors Inc., $650,000, and Securities America Inc., $625,000. These two independent broker/dealers are owned by Ladenburg Thalmann Financial Services Inc. This $1.275 million fine was imposed on March 12th., 2014, due to failure to supervise the hundreds of brokers who made up and sent false and inaccurate account statements to their clients.
According to the FINRA report, additionally, the firm Triad Advisors, (which has over 600 representatives and financial advisors) has been ordered to pay $375,000 in restitution to two clients. These two clients had received consolidated reports that showed fictitious promissory notes or other fictitious assets. This allowed two former Triad brokers to conceal their misconduct. Allegedly, several of the consolidated reports generated by the brokers at both firms inflated the investment values, even sometimes when the investments were in default.
FINRA also stated that in the Securities America (which has 2,235 registered representatives and financial advisors) settlement, they had allegedly issued inaccurate values for Medical Capital Holdings and Provident Shale Royalties, even though they had been in receivership from August of 2009. From a review of 800 positions entered manually by Securities America reps, 500 had been overvalued. Securities America, between 2003-2007, was the largest seller Medical Capital Holdings, which was a $2 billion Ponzi scheme. They also sold $25 million Provident Shale Royalties to 400 investors. Eventually, Ameriprise Financial Inc. sold Securities America to Ladenburg Thalmann in 2011.
Soreide Law Group represents clients nationwide before FINRA. If you have sustained investment losses due to your stock broker/financial advisor’s recommendations, please call us for a free consultation with an attorney on how to potentially recover those losses: 888-760-6552.
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