FINRA Censures and Fines Securities America Inc. for Supervisory Issues
The White Law Group is investigating potential securities claims involving Securities America, Inc. (CRD No. 10205)
Securities America Inc., a dually registered investment adviser and broker dealer, is headquartered in Lavista, NE.
According to a Letter of Acceptance Waiver and Consent posted by FINRA on March 29, 2021, the regulator has censured and fined Securities America $100,000 for supervisory violations in connection with the recommendations of an alternative mutual fund sponsored by LJM Funds Management.
FINRA’s findings state that between August 17, 2016, and February 8, 2018, Securities America reportedly failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM) and permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features. The firm reportedly failed to review its representatives’ LJM recommendations.
The fund apparently pursued a risky strategy that relied, in part, on purchasing uncovered options. In February 2018, LJM’s value dropped 80% during an extreme volatility event and the fund ultimately liquidated and closed, resulting in hundreds of thousands in losses for SAI’s customers.
Securities America’s representatives purportedly sold more than $616,000 in LJM to thirty-three customers.
In addition to the censure and fine the firm has established and implemented policies, procedures, and internal controls reasonably designed to address and remediate the issues; a $100,000 fine; and restitution of $235,979.77 plus interest as described below.
This matter reportedly originated from FINRA’s 2019 investigation of firms that sold LJM to retail customers, according to the AWC.
In the past, FINRA issued Regulatory Notices highlighting the risks of “complex products,” such as alternative mutual funds, and stressing the need for firms and their representatives to understand their unique risks and features before recommending them, specifically to retail customers.
Potential Lawsuits to Recover Financial Losses
The White Law Group has received numerous calls from investors who suffered losses investing in the LJM Preservation & Growth Fund. If you have concerns regarding investments you purchased through Securities America and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
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.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.