What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: July 1, 2015

Garden State Securities has entered into a Letter of Acceptance, Wavier and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) and was censured and fined $15,000 for failing to execute orders fully and in a timely manner. Specifically, the firm did not do its due diligence on how favorably trades would perform before suggesting the best transactions with firm customers. Garden State also did not show the correct entry time on brokerage order memorandum. This is against FINRA rules. The fine was imposed in November 2013.

Also, in January 2013, Garden State was fined $5,000 for transmitting execution or combined order/execution reports to the Order Audit Trail System (OATS). Therefore, the OATS reporting system was unable to accurately relay information based off of the data it was given. Garden State also did not report their findings in a timely basis.

In 2012, Garden State was fine $265,000 and also entered into an Offer of Settlement with FINRA, saying that each of Garden State’s associated personnel must complete 16 hours of AML training, and the firm must review its supervisory system.

One major and troubling complaint against the firm was in their adequate disclosure of other business activities. FINRA alleged that between October 2009 through March 2012, Garden State Securities failed to provide required details under the “Other Business” sections of Form U4 for 25 registered representatives at the company. The firm failed to make sure that the Form U4 disclosures were accurate. The Form U4 is the Uniform Application for Securities Industry Registration or Transfer. Investment advisers, broker-dealers and other issuers of securities must use the form to become registered in their appropriate jurisdictions. There are specific FINRA rules that delegate what language must be used for Form U4 requirements. If companies do not employ or enforce these rules, they can be liable for investment losses.

If you lost money with Garden State Securities, and would like to sue them in the FINRA arbitration forum, please call our Chicago-based securities law office at 312-332-4200 to speak to an attorney. The call is free with no obligation. We sue firms such as Garden State for the transgressions listed above. They, along with other firms, can be sued for failing to properly supervise their representatives, and failing to follow FINRA rules. If you invested financially with the company, please call us today.


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