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Written by 4:04 pm FINRA SEC Sanctions, Securities Fraud Articles

Securities America Inc.: Regulatory Overview  

Securities America Inc. Overview featured by top securities fraud attorneys, the White Law Group

The White Law Group reviews the regulatory history of Securities America Inc. 

Securities America Inc., a subsidiary of Advisor Group, is one of eight firms with plans to rebrand to “Osaic Wealth” this year. Securities America has been a FINRA member firm since November 1981, and is headquartered in La Vista, Nebraska. The firm has approximately 3,700 registered representatives and 2,100 branch offices. 

Securities America has had numerous regulatory actions, that can be found under its CRD/FINRA Broker Check (CRD#: 10205/SEC#: 8-26602)FINRA is the regulator who oversees brokers and brokerage firms.   

Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of FINRA and the SEC’s regulatory actions involving Securities America Inc. The firm reportedly has 88 disclosure events on its broker report, including 56 regulatory events, 27 arbitrations and 5 bonds 

FINRA Sanctions Securities America for Supervisory Failures 

January 2023 – According to a letter of acceptance, from September 2015 to September 2020, Securities America, Royal Alliance, and SagePoint failed to establish and maintain a supervisory system reasonably designed to ensure that all eligible customers received applicable sales charge waivers or special share classes in connection with rolling over 529 plans from one state plan to another. Some customers who were eligible for these waivers or special share classes did not receive them. Securities America agreed to the sanctions of a censure; restitution of $122,845.59 plus interest; and to remediate its supervisory issues. 

According to FINRA, this is not the first time Securities America has been sanctioned for supervisory failures.  

Securities America Sanctioned for Risky LJM Fund Sales 

March 29, 2021 – FINRA censured and fined Securities America $100,000 for supervisory violations in connection with the recommendations of an alternative mutual fund sponsored by LJM Funds Management.  

Between August 17, 2016, and February 8, 2018, Securities America 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. The firm reportedly failed to conduct reasonable due diligence allegedly failed to review its representatives’ LJM recommendations. 

LJM used 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 Securities America’s customers. Securities America’s representatives purportedly sold more than $616,000 in LJM to thirty-three customers. The firm  paid restitution of $235,979.77 plus interest. See Securities America, Inc. Sanctioned for Sales of LJM Fund 

 In July 2016, Securities America agreed to sanctions in which FINRA found that the firm failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that certain retirement plan and charitable organization customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. Securities America was censured and ordered to pay restitution to customers. Securities America self-reported the overcharges that affected approximately 1,500 customers and agreed to pay $1.54 million in restitution which includes interest charges. 

SEC Cracks Down on Mutual Fund Sales 

April 2018 – The SEC settled charges with Securities America Advisors and two other firms for allegedly breaching fiduciary duties to clients and generating millions of dollars of improper fees in the process. The firms reportedly failed to disclose conflicts of interest, according to the SEC’s orders. The three firms allegedly violated their duty to seek best execution by investing advisory clients in higher-cost mutual fund shares when lower-cost shares of the same funds were available. SEC Censures & Fines PNC, Securities America, and Geneos 

Securities America and Medical Capital Holdings Ponzi Scheme 

March 2017 – Securities America made a final payment of $1 million to Medical Capital Holdings investors to settle charges with the SEC. In 2011, Massachusetts ordered Securities America to pay $2.8 million in restitution to make the investors of Medical Capital Holdings whole. At the time, that settlement referred to the potential for pending actions. This $1 million in restitution was the final settlement in the Massachusetts case against Securities America. 

Between 2003 and 2009, Medical Capital Holdings raised $1.7 billion by selling private notes, purportedly to buy discounted medical receivables such as unpaid doctor or hospital bills that the firm would collect at full price. Approximately sixty investors, many of them seniors, bought promissory notes issued by Medical Capital Holdings. The Massachusetts case was a $1.7 billion Ponzi scheme sold mainly through independent broker-dealers. 

Dozens of independent broker-dealers sold the Medical Capital Holdings (MedCap) notes. But Securities America was by far the largest seller, and its advisers sold $697 million, receiving more than $26 million in compensation. The Massachusetts Securities Division sued Securities America alleging that the Securities America clients were not sophisticated investors, a requirement to purchase private placements. 

Broker Misconduct and Customer Complaints  

All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.  There have been several cases of registered representatives employed by Securities America Inc. who were allegedly involved in broker misconduct and fraudulent activities. When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.   

April 2023 – FINRA barred Securities America advisor Michael Raineri of Seattle, Washington after he allegedly converted customer funds. At the request of one of his customers, Raineri allegedly began paying some personal expenses for the customer. Between August 2018 and August 2022, Ranieri purportedly caused the customer to pay him at least $135,000, to reimburse him for the payments he had made. The payments to Raineri purportedly far exceeded the customer’s expenses Raineri had allegedly paid, and he was not entitled to the extra funds, according to FINRA.   Michael Raineri Barred from Securities Industry   

February 2019 The Securities and Exchange Commission barred former Securities America broker Hector May for allegedly running a $7.9 million Ponzi scheme with his daughter who served as the controller of his investment advisory firm. Hector May, of New York, NY, reportedly pleaded guilty in December 2018, to participating in a conspiracy to defraud investment advisory clients out of more than $11 million. Shortly thereafter, the SEC reportedly charged May and his daughter with allegedly running a multimillion-dollar Ponzi scheme. 

According to his FINRA BrokerCheck report, May was a registered representative with Securities America in New York, NY for 24 years until he was fired in March 2018 for “misappropriation of client assets.” 

September 2019 – Financial Industry Regulatory Authority (FINRA) reportedly barred Bobby Wayne Coburn in all capacities after he reportedly failed to provide information in FINRA’s investigation. FINRA was investigating allegations that Coburn was involved in the solicitation of multiple clients to invest in an unapproved private securities transaction and reportedly engaged in the settlement of a related customer complaint without the Firm’s knowledge or consent. According to a settled customer complaint on his broker report, a “Customer invested $30,000 in a Costa Rica real estate development and did not receive payments due under Promissory Note.” Coburn was reportedly affiliated with Securities America in Fort Meade, FL from February 2009 until April 2019. 

Potential FINRA Claims to Recover Investment Losses  

The White Law Group represents investors in FINRA claims against their broker dealers. If you have suffered losses due to broker negligence or broker fraud, we can help. Our firm can evaluate the strength of your case, draft a well-structured statement of claim that accurately presents your allegations of fraud and desired damages, and provide representation during the arbitration hearing by presenting evidence and making compelling arguments on your behalf. Additionally, an attorney can engage in negotiation efforts for a potential settlement before the arbitration process begins. Opting for our securities attorneys will ensure that your rights are safeguarded throughout the arbitration process, maximizing your likelihood of achieving a favorable resolution. 

If you have concerns regarding investments with Securities America Inc. please call The White Law Group at 888-637-5510.  

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.                  

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.                   

With over 30 years of securities law experience, The White Law Group can help you recover your investment losses.                   

With offices in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit https://whitesecuritieslaw.com.           


Tags: , , , , Last modified: February 15, 2024