Nancy Ellen Cole also known as Nancy Ellen Hall, of Sacramento, California, a stockbroker registered with Western International Securities Inc., was the subject of a customer initiated investment related FINRA securities arbitration claim that was settled for $72,000.00 in damages based upon allegations that Cole made misrepresentations of material fact in connection with the sale of corporate bonds when Cole was associated with Western International Securities Inc. Financial Industry Regulatory Authority (FINRA) Arbitration No. 23-00675 (December 16, 2023).
FINRA Public Disclosure additionally shows that on September 26, 2021, another customer filed an investment related complaint involving Cole’s conduct in which the customer requested $5,000.00 in damages based upon allegations that Cole engaged in unsuitable trading in structured products during the time that Cole was associated with Western International Securities Inc. The complaint was denied by the securities broker dealer.
Moreover, on June 15, 2022, United States Securities and Exchange Commission (SEC) brought an enforcement action against Cole based upon allegations that Cole, along with others at Western International Securities Inc., recommended GWG L Bonds without a reasonable basis to believe it was in customers’ best interests. Case No. 2:22-cv-04119.
According to SEC, GWG L Bonds were corporate bonds offered by GWG Holdings Inc. and they carried high levels of risk, lacked liquidity, and were only suitable for customers with substantial financial resources. The L Bonds mentioned in SEC’s complaint reportedly offered fixed interest rates ranging from 5.50 percent to 8.50 percent. GWG offered these bonds in durations of two-to-seven years. From July 2020 to April 2021, stockbrokers allegedly recommended and sold approximately $13,300,000.00 worth of L Bonds to customers.
The Complaint alleged that Cole and Western International Securities failed to exercise due diligence in comprehending the costs, rewards, and risks associated with L Bonds. When they advised customers to invest in L Bonds, the stockbrokers allegedly lacked an understanding of the risks tied to L Bonds and GWG.
Additionally, SEC alleged that Cole and Western International Securities recommended L Bonds to at least seven customers without a reasonable basis to believe that L Bonds were in the best interests of these customers. These customers had moderate or conservative-to-moderate risk tolerances. Their investment objectives apparently did not involve speculation or investing in illiquid assets. Some of the customers were retired.
Western International Securities’ written policies allegedly broadly mentioned the objectives of Regulation BI without providing specific guidance based on its particular operations. Additionally, the securities broker dealer allegedly had deficient procedures in place to enforce compliance with Regulation BI.
The Complaint alleged that Nancy Cole violated Securities Exchange Act of 1934 Rule 15l-1(a)(1).
Cole has been associated with Western International Securities Inc. in Sacramento, California, both as a stockbroker and as an investment adviser representative, since August 28, 2008.
