Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, Western International Securities, Inc. (CRD # 39262) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its failure to supervise relating to suitability.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Western International Securities, Inc.
Registration Background for Western International Securities, Inc.
Western International Securities, Inc. has been a member firm of FINRA since 1995. It is a full-service broker-dealer headquartered in Pasadena, CA. It has approximately 390 registered representatives and over 100 branch offices.
FINRA’s Allegations Against Western International Securities, Inc.
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated July 29, 2024 (No. 2021071099404), Western International Securities, Inc. consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From January 2016 through June 2020, Western failed to have a supervisory system that was reasonably designed to ensure compliance with applicable securities laws and regulations and with FINRA rules prohibiting excessive trading”;
- “Under Western’s WSPs for actively traded accounts, supervisors were supposed to review daily trade blotters and monthly account statements to detect potentially excessive trading”;
- “The WSPs failed to provide supervisors with guidance for evaluating cost-to-equity ratios, turnover rates, or any other useful indicators of potentially excessive trading”;
- “In addition, Western’s WSPs did not require supervisors to take reasonable steps to respond to any potentially excessive trading that they might identify”;
- “Western’s WSPs and trade-blotter-based surveillance were not reasonably designed to detect excessive trading”; and
- By virtue of its actions, Western International Securities, Inc. violated FINRA Rule 2111 regarding suitability, FINRA Rule 3110 regarding supervision, and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA’s Sanctions
As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s July 29, 2024 AWC also indicates that Western International Securities, Inc. consented to the following sanction(s):
- A censure;
- A fine in the amount of $475,000.00; and
- Restitution of $1,057,632.70 plus interest.
Western International Securities, Inc. Has A History of Securities Industry Customer Complaints and/or Regulatory Actions
In addition to Western International Securities, Inc. being sanctioned by FINRA after an investigation into its failure to supervise relating to suitability, FINRA BrokerCheck for Western International Securities, Inc. reveals it has a prior history of customer complaints and/or regulatory actions against it, including but not necessarily limited to the following:
- On November 1, 2022, the firm entered into an AWC with FINRA in which it consented to a finding of failing to establish, maintain, and enforce a supervisory system reasonably designed to achieve compliance with its suitability obligations. It consented to a fine in the amount of $400,000.00 and partial restitution in the amount of $471,450.57.
- On October 7, 2003 a customer-initiated arbitration was commenced against Western International Securities, Inc. The customer(s) allegations included misrepresentation suitability and accounted failure to supervise. The customer(s) further alleged damages in the amount of $82,256.00. On August 13, 2001, the panel issued an award against the firm in the amount of $75,129.00.
- On February 22, 2013, a customer-initiated arbitration was commenced against Western International Securities, Inc. The customer(s) allegations included breach of fiduciary duty, churning, misrepresentation, suitability, unauthorized trading, breach of contract, and failure to supervise. The customer(s) further alleged damages in the amount of $1,935.230.00. On April 7, 2014, the panel issued an award against the firm in the amount of $200,001.00.
Have You Lost Money?
If you or someone you know has or had a brokerage account with Western International Securities, Inc. and have concerns regarding losses in your investments 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.
