FINRA Sanctions VFG Securities for Supervisory Issues

VFG Securities Censured & Fined

According to FINRA, on June 28, 2017, VFG Securities Inc. (CRD #15121, Culver City, California) was issued an AWC in which the firm was censured and fined $75,000.

Without admitting or denying the findings, the VFG Securities consented to the sanctions and to the entry of findings that it failed to supervise as private securities transactions the investment advisory activities of two registered representatives who were dually registered with the firm and an affiliated registered investment advisor (RIA).

FINRA states that the two representatives allegedly participated in approximately 150 private securities transactions totaling approximately $9.6 million and involving three different offerings, and purportedly received advisory fees from the RIA for these investments. The representatives had previously disclosed to the firm their association with the RIA, which the firm approved. However, the firm allegedly treated investment advisory activities through the RIA as outside business activities and not as private securities transactions.

As a result, according to FINRA, the firm did not supervise these transactions as private securities transactions, nor did it maintain these transactions on its books and records. The findings also stated that by treating the representatives’ investment activities through the RIA as outside business activities rather than as private securities transactions, the firm allegedly failed to establish and maintain a supervisory system that was reasonably designed to achieve compliance with NASD Rule 3040.

For FINRA’s full findings see FINRA Case #2014038997601.

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This information, which is publicly available on FINRA’s website, has been provided by The White Law Group.

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