Next Financial Group, Houston, Texas
Texas Securities Commission orders Next Financial Group of Houston, Texas, to refund $500,000 to customers.
According to reports this week, the Texas Securities Commission has ordered Next Financial Group of Houston, Texas, to refund $500,000 to customers after a registered representative allegedly moved them into and out of A-share mutual funds to purportedly generate commissions.
According to the complaint, from 2014 through 2018, the broker allegedly made hundreds of trades involving the Class A shares of mutual funds, which typically cost investors more than other mutual fund share classes because they carry an upfront sales charge of up to 5% or higher.
The charge, known as a front-end sales load, is paid to the broker as a commission.
The firm has agreed to pay a $100,000 fine for purportedly failing to properly supervise the broker, who is reportedly no longer registered with Next or any other firm.
According to the regulator in a news release, Next Financial Group “failed to rein in the agent even though it received hundreds of alerts from the regulatory system it had set up to detect mutual-fund switching.”
Failure to Supervise
When brokers violate securities laws, such as making misrepresentations or making excessive trades, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
If you have concerns regarding your investments with Next Financial Group and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.