Dallas-based broker-dealer WFG Investments, Inc., also known as the Wilson Williams Financial Group, is facing a $650,000 "global fine" from FINRA for undisclosed reasons, which would be the firm's second significant fine in the past two years. FINRA fined WFG $200,000 in March of 2013 for failing to detect a stock-fraud scheme.
WFG's FINRA BrokerCheck (Firm Summary) reflects 18 past regulatory events, one civil event, and two instances of arbitration.
According to that document, WFG's March 2013 penalty stemmed from the firm's violation of FINRA and SEC rules, as well as the Securities Act of 1933. The findings state that the firm executed purchase and sale transactions in one individual's account, earning commissions of approximately $200,000 for the transactions.
FINRA's investigation uncovered a history of significant activity in that account, including the deposit and rapid sales of over 3.5 million shares in 22 separate transfers over seven months, wiring the proceeds after each sale. The report found that despite this great volume of transactions, WFG failed to investigate via independent inquiry to determine whether the deposited shares were freely tradable and whether the stock could be properly sold.
The investigation concluded that, by failing to recognize the red flags, WFG exposed a lack of adequate supervisory systems and procedures that should have raised questions about the sales, which turned out to be part of a stock fraud scheme.
Over 18 months since the fraud fine, WFG President David Williams noted that WFG has made "wholesale changes," which include the hiring of Chief Compliance Officer Robert Schlangen to oversee a compliance staff that has doubled in size.
Nonetheless, in its annual report of audited financials, which WFG filed with the SEC, the firm wrote that it "expects to incur a global fine from Finra in the near future and has accrued that expense in the amount of $650,000 as of June 30, 2014," further stating that the firm worked with FINRA to come up with the $650,000 estimate.
If you have invested with WFG Investments or any other firm whose deficient supervisory procedures or failure to conduct adequate due diligence has resulted in fraudulent or otherwise illicit activity that has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.
News: WFG Investments facing $650,000 Finra 'global fine' (InvestmentNews)