When A Brokerage Firm Violates Investors’ Best Interests Through Alleged Misconduct
FINRA Expels SW Financial For Allegedly Making Misrepresentations and Omissions
The Financial Industry Regulatory Authority (FINRA) has expelled SW Financial following multiple alleged violations related to Regulation Best Interest (Reg BI). The self-regulatory organization (SRO) contends that between January 2018 and December 2021, the broker-dealer and its co-owner Thomas Diamante made purported misrepresentations and omissions related to the sale of private placement offerings of pre-IPO securities and also allegedly engaged in churning and committed supervisory failures. This excessive trading allegedly impacted multiple customer accounts, resulting in costs of over $350K and losses greater than $465K.
According to FINRA, SW Financial violated its rules as well as the Securities and Exchange Commission’s (SEC’s) Reg BI’s Disclosure Obligation. The latter requires brokerage firms and their registered representatives to give customers complete and proper disclosures regarding investment recommendations, as well as any material facts that could pose a conflict of interest. SW Financial’s violations also included, allegedly, the firm underreporting the actual sales commissions they would receive on certain securities and not having reasonable grounds for recommending certain IPO-related securities to investors.
What Is SEC Regulation BI?
This rule sets up a “best interest” standard of conduct for brokerage firms and their associated persons any time they recommend an investment or security to a retail investor. While it is important that securities regulators hold broker-dealers and financial advisors accountable for violating Regulation Best Interest if you want to maximize their chances for a full financial recovery related to broker misconduct or negligence, then seriously consider filing your own broker fraud lawsuit for damages.
How Can Our Skilled Brokerage Firm Arbitration Lawyers Help You With Your Reg BI Related-Investment Losses?
Shepherd Smith Edwards and Kantas (investorlawyers.com) represent retail investors, retirees, elderly investors, high-net-worth investors, and institutional investors in suing their broker-dealers for causing them financial losses related to Reg BI violations, unsuitability, churning, misrepresentations and omissions, overconcentration, failure to supervise, and much more. With over a combined century’s worth of experience in securities litigation and securities law—including as former brokers at some of the largest Wall Street firms—we have now spent more than 30 years exclusively fighting for clients like you.
Should we agree to work together, following your free, no-obligation case consultation, we can thoroughly investigate the cause of your investment losses and how brokerage firm negligence may have played a role. After preparing/filing your broker misconduct lawsuit, we would zealously represent your claim.
More than 90% of the investors we have represented have received full or partial financial recovery with our help.
Call our team of Brokerage Firm Arbitration Lawyers at (800) 259-9010 today.