FINRA Sanctions Brokers William Weisbrod and Lilia Nia after Allegations of Illegal Trading Activity
FINRA, the regulator who oversees broker and brokerage firms, has reportedly barred William Weisbrod and suspended Lilia Nia from working in the securities industry.
According to The Financial Industry Regulatory Authority two individuals from Fairfield, New Jersey–based Purshe Kaplan Sterling Investments, were allegedly engaged in trading activity that generated more than $2 million in commissions and markup charges for a client.
According to FINRA, advisors William Weisbrod and Lilia Nia reportedly ran up a total of more than $1 million in commissions trading fixed income securities during a period spanning September 2013 and October 2017, while they were employed at Fairfield, New Jersey–based Purshe Kaplan Sterling Investments. According to The Financial Advisor IQ, “The trades were executed in a non discretionary advisory account Nia managed for a community bank, FINRA asserted in letters of acceptance, waiver and consent published this week.”
According to the Letter of Acceptance Nia is connected to hundreds of unauthorized transactions in the account of a community bank, which was her PKS customer, without obtaining instructions from any person authorized to conduct trading for the bank. Further, according to the AWC, Weisbrod recommended that the bank engage in a risky trading strategy involving hundreds of fixed-income securities purchased through PKS.
Weisbrod and Nia reportedly violated FINRA rule 2010, which imposes upon Finra-associated persons “high standards of commercial honor and just and equitable principles of trade.”
Breach of Fiduciary Duty
A breach of fiduciary duty is a common occurrence amongst the securities realm, and it occurs when someone who owes a legal or ethical duty to act in the best interest of another person fails to fulfill that duty. In other words, it’s a violation of the trust that one person places in another.
When a breach of fiduciary duty occurs, the fiduciary has typically acted in a way that benefits themselves, or another party, to the detriment of the party to whom they owe the duty. This form of breach can be expressed in several ways, such as failing to disclose conflicts of interest, misappropriating funds, engaging in self-dealing, or violating a duty of confidentiality.
Unauthorized trading in brokerage accounts occurs when a broker buys or sells securities without your prior knowledge, consent, or authorization. This can happen in various ways, such as when a broker makes trades in your account without your approval, or when a broker exceeds the trading authority that you have granted them.
If your broker engages in unauthorized trading, you may have legal recourse to recover any losses incurred as a result. You may be able to recover your losses by filing a FINRA arbitration claim.
FINRA BrokerCheck – William Weisbrod & Lilia Nia
The FINRA BrokerCheck tool is a free online tool that allows investors to research and validate the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
BrokerCheck offers detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA. It’s also a great way to review employment history, licensing status, and any regulatory actions or complaints filed against them.
According to FINRA broker report, William Weisbrod and Lilia Nia were reportedly affiliated with the following firms during their careers, among others:
B – 4/27/2009-2/18/2021, Purshe Kaplan Sterling Investments (CRD#:35747), Fairfield, NJ
B – 04/22/2005 – 02/06/2009, Citigroup Global Markets INC. (CRD#:7059), New York, NY
B – 09/03/2013 – 02/26/2021, Purshe Kaplan Sterling Investments (CRD#:35747), Fairfield, NJ
B – 04/24/2012 – 09/16/2013, Wells Fargo Advisors Financial Network, LLC (CRD#:11025), Fairfield, NJ
It was reported by FINRA that Weisbrod and Nia voluntarily resigned from Purshe Kaplan in February 2021.
Duty to Supervise
Brokerage firms are required to adequately supervise their advisors. They must ensure they are complying with FINRA rules. If firms are unable to appropriately supervise their advisors, they may be liable for investment losses due to negligent supervision for the misconduct of their employees. Brokerage firms can be held responsible for any losses in a FINRA arbitration claim if it is determined that they failed to properly supervise their agent.