FINRA Censures and Fines JW Cole Financial Inc. for Supervisory Issues

The White Law Group is investigating potential securities claims involving JW Cole Financial Inc., Inc. (CRD No.124583)

JW Cole Financial Inc., a dually registered investment adviser and broker dealer, is headquartered in Tampa, Florida. 

According to a Letter of Acceptance Waiver and Consent (AWC) posted by FINRA on March 29, 2021, the regulator has censured and fined JW Cole Financial Inc. $50,000 for supervisory violations in connection with the recommendations of an alternative mutual fund –  the LJM Preservation and Growth Fund (LJM) The firm was also ordered to pay restitution of $163,527 plus interest and establish and implement policies, procedures, and internal controls reasonably designed to address and remediate the issues identified in this AWC.

FINRA’s findings state that between May 2017 and December 2017, JW Cole reportedly failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM) and permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features. 

The fund apparently pursued a risky strategy that relied, in part, on purchasing uncovered options. In February 2018, LJM’s value dropped 80% during an extreme volatility event and the fund ultimately liquidated and closed, resulting in hundreds of thousands in losses for LJM investors.

JW Cole Financial Inc.’s representatives purportedly sold approximately $1 million in LJM to customers. 

This matter stems from FINRA’s 2019 investigation of firms that sold LJM to retail customers, according to the AWC.  FINRA has previously issued Regulatory Notices highlighting the risks of “complex products,” such as alternative mutual funds, and stressing the need for firms and their representatives to understand their unique risks and features before recommending them, specifically to retail customers.

Potential Lawsuits to Recover Financial Losses

The White Law Group has received numerous calls from investors who suffered losses investing in the LJM Preservation & Growth Fund. If you have concerns regarding investments you purchased through JW Cole Financial Inc. you may be able to file a complaint against the firm.

If you would like to speak with a securities attorney about this matter, please call the offices of The White Law Group at 888-637-5510.

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.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.