FINRA Censures and Fines Triad Advisors for Supervisory Failures
According to The Financial Industry Regulatory Authority (FINRA) on December 29, the regulator has censured and fined Triad Advisors $195,000 after the firm allegedly failed to supervise recommendations of the high-risk LJM Preservation and Growth Fund (LJM).
The firm also agreed to pay restitution of $510,256.57 and has established and implemented policies, procedures, and internal controls reasonably designed to address and remediate the issues.
According to a Letter of Acceptance Waiver and consent (AWC), from September 12, 2016 to February 1, 2018, Triad failed to reasonably supervise representatives’ recommendations of the LJM Preservation & Growth Fund (LJM), an alternative mutual fund.
The AWC notes that Triad permitted the sale of LJM on its platform without conducting reasonable due diligence of the company 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.
Triad also reportedly lacked a reasonable supervisory system to review representatives’ LJM recommendations. Triad representatives sold $2,267,000 in LJM to fifty-eight customers, according to FINRA’s findings. LJM’s value dropped 80% during an extreme volatility event in February 2018 and the fund ultimately liquidated and closed, resulting in hundreds of thousands in losses for Triad’s customers.
From March 27, 2014 to January 1, 2019, Triad also reportedly failed to obtain required account information for customers who purchased the private offerings of LJM Partners, Ltd. and LJM Preservation & Growth Fund LP. According to FINRA, the firm failed to enforce written supervisory procedures reasonably designed to ensure that such information was obtained by the firm, in violation of FINRA Rules.
Potential Lawsuits to Recover Financial Losses
The White Law Group has received numerous calls from investors who suffered losses involving LJM funds. To learn more about the firm’s investigation please see:
The foregoing information is all publicly available and provided by the White Law Group. If you are concerned about investments with Triad Advisors LLC, the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.