The White Law Group is investigating potential securities claims involving Western International Securities (CRD#: 39262, Pasadena, CA).
Western International Securities is an independent broker-dealer based in Pasadena, CA with 14 regulatory event disclosures.
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. 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.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Broker Misconduct and Customer Complaints
There have been several cases of registered representatives employed by Western International who were allegedly involved in broker misconduct and fraudulent activities.
August 2019 – Most notably, former Western International advisor Dawn Bennett, was sentenced to 20 years in prison after she was convicted on 17 counts of securities fraud, wire fraud and bank fraud after a two-week trial in Maryland last year.
Bennett allegedly used promissory notes to raise more than $20 million from at least 46 investors in her company, DJBennett.com, according to prosecutors.
The White Law Group has represented many of Dawn Bennett’s clients and continues to investigate the liability that her FINRA registered employer, Western International Securities, may have for failure to properly supervise her during her time with the firm as well as its failure to warn firm customers about Dawn Bennett after she left the firm.
Those claims generally allege breach of fiduciary duty, negligent supervision, unsuitability in high-risk investments and failure to warn.
December 2019 – Licensed insurance agents Clement Chichester and wife Brittney Jade Sias, who were formerly registered representatives with Western International Securities in WestLake Village, CA, allegedly sold annuities to a 91-year-old former public school teacher in order to purportedly profit on large commissions, then allegedly convinced her to liquidate the policies so they could allegedly fund their own real estate investments.
Following a guilty plea on July 6, 2019, Chichester was convicted on multiple felony counts and ordered to pay $750,000 restitution to his elderly victim. Under the terms of his conviction, Chichester’s felonies were reportedly reduced to misdemeanors after he repaid the victim $750,000, which he did on September 11, 2019.
October 2019 – Dennis Mehringer Jr.. former Western International advisor, was reportedly barred from working in the securities industry after he allegedly failed to provide testimony in FINRA’s investigation into whether he “had engaged in unsuitable trading and other misconduct during the period from January 2017 through May 2018.”
According to FINRA’s complaint filed in December 2016, Mehringer allegedly made unsuitable recommendations that caused a customer to purportedly engage in excessively expensive short-term trading of mutual fund Class A shares. According to FINRA’s findings, Mehringer allegedly repeatedly recommended, and caused the customer to engage in, short-term purchases and sales of 84 mutual fund Class A positions in five of the customer’s accounts.
Merhinger reportedly has 12 customer complaints on his broker report. Allegations include unsuitable investments, misrepresentation, fraud, and unauthorized trading, among others.
FINRA Censures and Fines Western International Securities
Western International Securities has also reportedly had issues with regulators.
May 2020 – Western International Securities agreed to sanctions over its alleged failure to amend U4 reports on more than 10% of its approximately 475 brokers to disclose liens, judgments and/or bankruptcies against them totaling more than $5.6 million.
The broker-dealer apparently failed to fix its supervisory system or file reports despite receiving about 100 letters and 800 emails from Finra about 52 registered reps believed to have unreported events, according to Letter of Acceptance, Waiver and Consent (AWC).
The alleged unreported events at Western International reportedly occurred from October 2011 through June 2018, according to the AWC.
The firm agreed to a censure and fine of $325,000 for failing to properly supervise its reps and for violating Rule 2010 requiring FINRA members to operate with high standards of commercial honor and maintain just and equitable principles of trade.
July 2019 – The Financial Industry Regulatory Authority (FINRA) reportedly censured and fined Western International Securities for overcharging customers on mutual fund transactions placed in customers’ accounts. FINRA’s findings state that forty customers were overcharged by an estimated total of $305,000.00. FINRA reportedly censured and fined the firm $75,000 and requested they provide remediation to Eligible Customers.
February 2018 – FINRA issued an AWC in which Western International was censured, fined $125,000 and ordered to pay $521,098.10, plus interest, in restitution to customers.
According to FINRA, the firm reportedly failed to establish, maintain and enforce a supervisory system and WSPs reasonably designed to ensure that registered representatives’ recommendations regarding leveraged, inverse and inverse-leveraged exchange-traded funds (non-traditional ETFs) complied with applicable securities laws and regulations, and FINRA rules.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Western International Securities and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.