VFG Securities, headquartered in Culver City, California, has been censured and fined $75,000.00 by Financial Industry Regulatory Authority (FINRA) based upon allegations that it failed to supervise securities transactions that its registered representatives effected, and did not maintain accurate records and books in reference to securities transactions that its representatives facilitated. Letter of Acceptance, Waiver and Consent, No. 2014038997601 (June 28, 2017).
According to the AWC, from May of 2013 to September of 2014, two of the firm’s registered representatives facilitated an estimated one-hundred and fifty securities transactions outside the firm’s auspices involving the use of $9,600,000.00 of investor funds. The transactions were reportedly effected by representatives while they were registered with the firm’s investment advisory, wherein advisory fees were paid to the representatives as a result of their efforts.
The AWC revealed that the firm erroneously concluded that the representatives’ activities constituted outside business activities which had been authorized and therefore permissible; however, the activities were deemed by FINRA to be private securities transactions. Consequently, the transactions had not been supervised by the firm as required; conduct violative of FINRA Rule 2010 as well as NASD Rules 3040(c) and 3010(a). Moreover, the AWC stated that the firm did not place the representatives’ transactions on its records and books; conduct violative of FINRA Rule 2010 and NASD Rules 3040(c).
This is not the first time that the firm was sanctioned for supervisory failures. Particularly, the firm was censured and fined $50,000.00 by FINRA Office of Hearing Officers pursuant to an Order Accepting Offer of Settlement containing findings that the firm, inter alia, did not adequately design written procedures or supervision systems to monitor potential overconcentration of customers’ assets in illiquid alternative investments, and did not adequately supervise the review of consolidated reports that were distributed to customers. Department of Enforcement v. VFG Securities, Inc., No. 2013038283001 (Nov. 21, 2016).
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
