Next Financial Group, Inc. (“Next Financial Group”) (CRD# 46214) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Next Financial 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 Next Financial Group, you should strongly consider hiring an investment fraud 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 Next Financial Group?
If you’ve lost money caused by Next Financial Group and/or its employees’ misconduct then the answer is, YES, you can sue Next Financial 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 Next Financial Group in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Next Financial Group is to call Attorney Pearce at our office at 800-732-2889.
What is Next Financial Group?
Next Financial Group (CRD# 46214) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.
As a registered broker-dealer, Next Financial Group is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.
A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
Next Financial Group Has Many Different Regulatory Problems
Next Financial Group’ rapid growth has not been without consequences. There have been approximately 26 state and 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) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Next Financial 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. Next Financial Group is a repeat offender: there are over 26 FINRA-reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.
A Brief Overview of Some of the Regulatory Problems Next Financial Group Has Faced Over the Years*
Next Financial Group has been repeatedly censured, warned, and fined multi-millions of dollars 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:
Failure to Establish and Maintain an Adequate Supervisory System: Sales Charge Discounts
Brief overview: In January 2016, Next Financial Group faced scrutiny for lacking an appropriate supervisory system to ensure customers received all available discounts on sales charges. Consequently, some clients were repeatedly overcharged. As a result, FINRA took action against the brokerage firm, imposing a $125,000 fine and ordering restitution of over $216,000 to affected clients.
Unfair Manipulation of Prices
Brief overview: In December 2014, Next Financial Group was investigated for allegedly manipulating the price of certain securities by engaging in transactions between the firm’s own account and its clients’ accounts. FINRA discovered 19 instances where the firm provided unfair prices to clients, benefiting itself. Next Financial Group agreed to penalties, including a $265,000 fine and payment of $177,170.01 in financial restitution to affected customers, without admitting or denying the allegations.
Failure to Supervise Sales Representatives: False Advertising
Brief overview: In December 2011, Next Financial Group received a cease and desist letter from the New Hampshire Bureau of Securities. It was discovered that one of the firm’s agents distributed sales seminar fliers and marketing materials containing false information. Next Financial Group consented to the sanctions, including a $120,000 fine and additional financial penalties of $20,000, without admitting wrongdoing.
Negligent Sale of High-Risk Private Placements
Brief overview: In November 2011, FINRA found Next Financial Group negligent in approving the sale of high-risk private placements, specifically the Provident Royalties investment. Despite numerous red flags and adverse information, the firm sold over $20 million worth of this failed investment product. Next Financial Group was ordered to pay $2,000,000 in financial restitution to affected customers. Additionally, the CEO and CCO were temporarily suspended due to the severity of the violation.
Excessive Trading of Customer Accounts (Churning)
Brief overview: In November 2010, it was discovered that Next Financial Group lacked proper supervisory measures to prevent excessive trading, also known as churning, by its securities representatives. Churning occurs when brokers excessively trade in customer accounts to increase their own fees or commissions. As a result of Next Financial Group’s failure to detect and prevent churning, FINRA fined the firm $400,000 and ordered full financial restitution plus interest to affected customers.
*Above are only some of the regulatory disciplinary actions filed against Next Financial Group by FINRA. NASSA and other state securities regulator investigations and enforcement actions account for another 26 BrokerCheck disclosures.
Next Financial Group Customer Complaints
There have been scores of customer complaints filed against Next Financial Group stockbrokers and investment advisors over the years. We have launched many investigations of current and former Next Financial Group advisors:
- Charles Doraine of NEXT Financial Group, Inc.
- Jeffrey Mathis of Next Financial Group, Inc.
- Charles Kulch of Next Financial Group, Inc
- Raymond Marquez of Merrill Lynch Pierce Fenner & Smith
- Lafayette Randle of Fortune Financial Services
- Steven Maher of American Portfolios Financial Services
- Raymond Ferro Formerly With Woodbury Financial Services
- Stephen Dellelo of NEXT Financial Group
- Jeffrey Mathis of NEXT Financial Group
- Douglas Simanski formerly with NEXT Financial Group
- Brian Radoo of Union Capital
- Alexander Bender of Commonwealth Financial Network
- Farid Farhoumand of Next Financial Group, Inc.
- Kevin Nevin formerly with Dempsey Lord Smith, LLC
- Ronald Segon of Next Financial Group, Inc.
- Robert Strang, III of Next Financial Group, Inc.
- Kathryn Frank of Next Financial Group, Inc.
If you have lost money investing with any of these Next Financial 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 Next Financial Group 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 Next Financial Group 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. Next Financial 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 key to your success. Many customers make the mistake of contacting Next Financial Group without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Consult With An Attorney Who Recovers Investment Losses Caused By Next Financial Group Today!
The investment loss 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 Next Financial 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.