A La Vista-based securities industry broker-dealer has been fined $100,000 for not catching emails that misrepresented the safety, risk and liquidity of two investment funds.
The Financial Industry Regulatory Authority said in the June disciplinary report released Monday that Securities America, a division of Miami-based Ladenburg Thalman Financial Services, agreed to the fine without admitting or denying the findings.
A company spokeswoman said in an emailed statement Monday that the problem has been fixed.
FINRA, the investment industry's self-policing watchdog authorized by the Securities and Exchange Commission, said the violations happened from 2007 through most of 2008. Three representatives in Ohio, FINRA said, sent emails to customers downplaying the risk and exaggerating the safety of two investment funds.
“Those emails contained material misrepresentations and misleading statements about the safety and liquidity,” FINRA said.
Securities America employs about 400 people in La Vista and has about 1,700 FINRA-registered investment representatives nationwide. FINRA said the company's email monitoring system should have automatically flagged emails with certain trigger words such as “safe” and “guaranteed” and routed them to supervisors for review.
“Enhancements to our email monitoring system have been made, and we are glad to resolve this matter,” said Natalie Hadley, a Securities America spokeswoman.
The investments in question were the IMH Secured Loan Fund and the Medical Provider Funding Corp., according to FINRA documents. IMH, based in Arizona, last year reached a tentative settlement on investor class-action lawsuits over the fairness of changes to the company's structure. The parent of Medical Provider Funding in 2009 was halted by the SEC from proceeding with a $77 million offering, with fraud cited by the federal regulator.
Founded in 1984, Securities America offers investment management and financial advice and planning. Ladenburg Thalmann bought the firm in November 2011 from Ameriprise Financial Inc.
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