Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, J.W. Cole Financial, Inc. (CRD # 124583) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its failure to adequately supervise its representatives’ recommendations of LJM Preservation & Growth Fund (LJM), an alternative mutual fund.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding J.W. Cole Financial, Inc. and LJM.
Registration Background for J.W. Cole Financial, Inc.
J.W. Cole Financial, Inc. has been a member of FINRA since 2003 with its main office located in Tampa, FL. The firm is a broker-dealer that operates on an independent contractor model. It has approximately 277 branch offices with approximately 4,200 registered representatives.
FINRA’s Allegations Against J.W. Cole Financial, Inc.
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated March 18, 2021, J.W. Cole Financial, Inc. consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “Between May 2017 and December 2017, [J.W. Cole Financial, Inc.] failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM)”;
- “[J.W. Cole Financial, Inc.] permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options”;
- “[J.W. Cole Financial, Inc.]…lacked a reasonable supervisory system to review representatives’ LJM recommendations”;
- “[T]he firm had no system or procedures to determine whether a new mutual fund constituted a “complex product…””;
- “[T]he firm did not provide any guidance or training to representatives regarding the risks and features of alternative mutual funds and did not have written supervisory procedures advising firm principals how to supervise recommendations of alternative mutual funds”; and
- By virtue of his it’s actions, J.W. Cole Financial, Inc. violated FINRA Rule 3110, regarding supervision and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA Sanctions J.W. Cole Financial, Inc.
FINRA’s March 18, 2021 AWC also indicates that as a result of J.W. Cole Financial, Inc.’s failure to supervise the sales of the LJM Preservation & Growth Fund, J.W. Cole Financial, Inc. consented to the following sanction(s):
- A censure;
- A fine in the amount of $50,000.00; and
- Restitution in the amount of $163,527.00.
J.W. Cole Financial, Inc Has No History of Regulatory Actions
Although the March 18, 2021 AWC makes clear J.W. Cole Financial, Inc. was censured and fined for its failure to adequately supervise sales of the LJM Preservation & Growth Fund, FINRA BrokerCheck for J.W. Financial, Inc. reveals it has no prior history of regulatory actions.
J.W. Cole Financial, Inc Has No History of Customer Complaints
FINRA BrokerCheck for J.W. Cole Financial, Inc. also reveals it has no history of customer complaints and/or customer-initiated arbitrations.
If you or someone you know has or had a brokerage account with J.W. Cole Financial, Inc. and have concerns regarding losses in your investments, including the LJM Preservation & Growth Fund or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.