Laidlaw & Company LTD Fined $200,000 

Laidlaw & Company Reportedly Sanctioned for Failure to Supervise, other Regulatory Failures 

According to the Financial Industry Regulatory Authority (FINRA), the regulator has reportedly censured and fined Laidlaw & Company LTD $200,000 after a cycle examination of the firm. 

FINRA, the self-regulatory agency that oversees brokers and brokerage firms, reportedly found that the firm failed to maintain the required net capital while operating a securities business in violation of SEC and FINRA rules. SEC rules prohibit a broker-dealer from engaging in a securities business if its net capital falls below a certain amount.  FINRA Rule 2010, which provides that a FINRA member, “in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”  

The firm’s net capital deficiencies occurred during four periods between February 2018 and July 2022. During all of these periods, the firm’s required minimum net capital ranged between approximately $100,000 and approximately $240,000. Further, Laidlaw allegedly incorrectly reported its net capital position in March 2021.  

Laidlaw and Company also purportedly failed to maintain accurate books and records concerning its net capital position between January 26, 2018, and July 21, 2022, and filed 24 inaccurate FOCUS reports between January 2018 and July 2022 that reportedly overstated the amount of the firm’s net capital and excess net capital.  

FINRA Rule 3110 Failure to Supervise  

Laidlaw and Company’s supervisory system was reportedly not reasonably designed to achieve compliance with FINRA rules governing private placement due diligence in violation of FINRA Rule 3110. In connection with three private placements the firm recommended to customers between February 2018 and January 2019, the firm failed to conduct and document reasonable investigation of the offerings. 

 FINRA Rule 3110 (Failure to Supervise) requires a firm to establish and maintain a system to supervise the activities of its associated persons that is reasonably designed to achieve compliance with securities laws and regulations and FINRA rules.  

In addition to the censure and fine, the firm will be required to certify that the firm has remediated the issues within sixty days of the notice. 

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