FINRA Sanctions Wilson-Davis Co. Inc. for Failure Supervise
The White Law Group is investigating potential securities claims involving Wilson-Davis Co. Inc. (CRD# 3777).
The Financial Industry Regulatory Authority (FINRA) has censured and fined Wilson-Davis, a self-clearing broker-dealer that specializes in microcap liquidation and trading, according to a letter of acceptance waiver and consent on July 16.
Despite the known risks associated with the firm’s microcap liquidation business, from February 2015 through October 2015, Wilson-Davis and its “Designated Supervisors” purportedly failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, according to FINRA.
These same “Designated Supervisors” allegedly failed to reasonably supervise a registered representative and market maker’s trading in NuGene International, Inc. (ticker, “NUGN”) stock by purportedly ignoring various “red flags” of potentially suspicious or manipulative trading set forth in the firm’s WSPs, which also failed to establish how the firm’s trading activity should be supervised.
According to FINRA, in practice, Wilson-Davis purportedly failed to conduct a reasonable review of microcap liquidation and trading activity to detect and prevent potentially suspicious or manipulative trading, including the trading activity in NUGN in 2015. As a result, Wilson-Davis, and its “Designated Supervisors” reportedly violated numerous FINRA rules.
Additionally, from February 2015 through October 2015, Wilson-Davis and its president, who was responsible for the firm’s anti-money laundering (AML) program, purportedly failed to establish and implement AML policies and procedures reasonably designed to detect, investigate and report suspicious activity related to the firm’s microcap liquidation business.
As a result, numerous “red flags” of suspicious activity related to NUGN trading and liquidation activity reportedly went undetected and unaddressed.
As a result, Wilson-Davis was censured and fined $500,000 and FINRA placed a business line restriction on the firm until it reaches compliance related to the alleged regulatory issues.
Potential Lawsuits to Recover Financial Losses
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 Wilson-Davis Co. Inc. 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.