The Leaders Group, Inc. (“Leaders Group”) (CRD# 37157) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. At the Law Offices of Robert Wayne Pearce, we have investigated Leaders Group, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against Leaders Group, you should strongly consider hiring an investment loss lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue The Leaders Group, Inc.?
If you’ve lost money caused by Leaders Group and/or its employees’ misconduct then the answer is, YES, you can sue Leaders Group but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Leaders Group in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Leaders Group is to call Attorney Pearce at our office at 800-732-2889.
What is The Leaders Group, Inc.?
Leaders Group (CRD# 37157) has been registered with FINRA as a broker dealer since 1995. The company is controlled by the Wickersham family and headquartered in Littleton, Colorado with small branch offices located throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 500 Leaders Group offices with over 1000 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
The Leaders Group, Inc. Has Many Different Regulatory Problems
Leaders Group’s rapid growth has not been without consequences. There have been approximately 4 Federal, state and/or self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against Leaders Group for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Leaders Group is a repeat offender: there are at least 2 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS THE LEADERS GROUP, INC. HAS FACED OVER THE YEARS*
Leaders Group has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:
FINRA Sanctions The Leaders Group For Numerous Supervisory Lapses
This matter involves multiple supervisory and related deficiencies that FINRA discovered to have occurred during the relevant period. The deficiencies pertained to consolidated reports, internal inspections, heightened supervision, outside business activities, email, variable annuities, and communications with the public. FINRA concluded such deficiencies resulted in violations of NASD Rules 3010 and 2210; FINRA Rules 4511, 3270, 2210, and 2010; Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Exchange Act Rule 17a-4(b). FINRA discovered more deficiencies during this time period relating to compensation arrangements entered into by The Leaders Group that paid commissions derived from a securities transactions to non-registered entities, thereby violating NASD Rule 2420, FINRA Rules 4511 and 2010, and Section 17(a) of the Exchange Act and Exchange Act Rule 17a-3(a)(19)(i). For the supervisory lapses, FINRA imposed a censure and a fine of $95,000 upon the broker-dealer.
FINRA Sanctions The Leaders Group For AML Supervisory Failures
During one of FINRA’s investigations of The Leaders Group, it found the broker-dealer failed to develop and implement a written anti-money laundering (AML) program reasonably designed to achieve and monitor compliance with the requirements of the Bank Secrecy Act, 31 U.S.C. §5311, et seq., and the regulations promulgated thereunder, and that such acts, practices and conduct constitute separate and distinct violations of NASD Conduct Rules 2110 and 3011(a), (b) and (d) by Respondent and for which it was censured and fined $10,000.
*Above are only some of the regulatory disciplinary actions filed against Leaders Group by FINRA. There are at least 2 more SEC, FINRA, NASSA, and/or state securities regulator investigations and enforcement actions reported on BrokerCheck as regulatory disciplinary proceeding disclosures.
The Leaders Group, Inc. Customer Complaints
There have been hundreds of complaints filed against Leaders Group stockbrokers and investment advisors over the years. We have launched a number of investigations of current and former Leaders Group advisors, including:
If you have lost money investing with these Leaders Group advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does The Leaders Group, Inc. Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did The Leaders Group, Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Leaders Group is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is the key to your success. Many customers make the mistake of contacting Leaders Group without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By The Leaders Group, Inc. Today!
The attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Leaders Group cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.