Sigma Financial Corporation (“Sigma Financial”) (CRD# 14303) 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 Sigma Financial, 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 Sigma Financial, 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 Sigma Financial Corporation?
If you’ve lost money caused by Sigma Financial and/or its employees’ misconduct then the answer is, YES, you can sue Sigma Financial 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 Sigma Financial in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Sigma Financial is to call Attorney Pearce at our office at 800-732-2889.
What is Sigma Financial Corporation?
Sigma Financial (CRD# 14303) has been registered with the SEC and FINRA since 1983. The company headquartered in Ann Arbor, Michigan with smaller 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 390 Sigma Financial branch offices with over 650 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
Sigma Financial Corporation Has Many Different Regulatory Problems
Sigma Financial’s rapid growth has not been without consequences. There have been approximately 15 Federal, 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) 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 Sigma Financial 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. Sigma Financial is a repeat offender: there are over 8 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 SIGMA FINANCIAL CORPORATION HAS FACED OVER THE YEARS*
Sigma Financial has been repeatedly censured, warned, and fined over $1 million 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 Sigma Financial For ETF Sales Abuses
FINRA investigated and discovered that Sigma Financial failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with securities laws, regulations, and FINRA Rules applicable to the sales of leveraged, inverse, and inverse-leveraged exchange-traded funds (“Non-Traditional ETFs”). As a result, FINRA concluded that Sigma Financial violated FINRA Rules 3110 and 2010 and NASD Rule 3010. These violations were aggravated by the fact that Sigma Financial represented to FINRA that it would implement specific corrective measures to cure these deficiencies, but failed to implement the measures in the time-frame anticipated by FINRA based on Sigma Financial’s representations. Notwithstanding the fact it ignored its obligations, FINRA only censured and fined the firm $100,000.
FINRA Sanctions Sigma Financial For UIT Sales Abuse
FINRA investigated and discovered Sigma Financial failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (“UITs”) in violation of FINRA Rule 2010. In addition, Sigma Financial failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases in violation of NASD Rule 3010 and FINRA Rule 2010 for which it was censured and fined $100,000.
FINRA Sanctions Sigma Financial For Supervisory Deficiencies
FINRA investigated and determined certain supervisory deficiencies existed at Sigma Financial. The deficiencies existed in specific areas of Sigma’s supervisory systems and procedures, its supervision of registered representatives, the firm’s suitability processes and procedures, some of its implemented, procedures relating to customer information, and also concerning branch office registration for purposes of trade execution.
NASD Rule 3010 requires that FINRA member firms establish and maintain a system of supervision that is reasonably designed to achieve compliance with securities laws, regulations and pertinent rules. As part of this system, firms must also create and implement written supervisory procedures (“WSPs”) that address their business and activities. Moreover, firms have a responsibility under Rule 3010 to conduct inspections where such business takes place and review the correspondence of their representatives.
As a result of these deficiencies, FINRA concluded Sigma Financial violated NASD Rules 3010(a)-(d) and FINRA Rule 2010, and censured and fined the broker-dealer $185,000.
FINRA Sanctions Sigma Financial For Paying Commissions To Unlicensed Persons
FINRA investigated and found during the relevant period, Sigma Financial paid transaction based compensation to non-registered DBA entities owned by certain of its registered representatives when compensating them for securities transactions they effected. Specifically, FINRA found that Sigma Financial paid transaction based compensation totaling $11,406,377 to 101 nonregistered DBA entities for over 2 years. Sigma financial should have been paying compensation, commissions, concessions or fees directly to the registered representatives who effected the transactions. NASD Rule 2420 prohibits FINRA members from granting to nonmembers any selling concession in connection with any securities transaction. As a result of the foregoing activities, FINRA concluded that Sigma Financial violated Rule 2420 and FINRA Rule 2010 for which it was censured and fined only $15,000.
FINRA Sanctions Sigma Financial For TIC Sales Misconduct
FINRA investigated and found that Sigma Financial allowed another company to offer and sell investments in tenancy-in-common, the multi-tenant NNN leases and multi-family communities. The company advertised this offering and the Wall Street Journal and elsewhere. Sigma Financial sent mailers and distributed fliers announcing complementary workshops to explore potentially greater cash-on-cash returns with real property investments through 1031 exchanges and TIC co-ownership of real estate. In addition to the advertisements, Sigma Financial maintained a website describing the same real estate investment offerings. FINRA found that Sigma Financial offered and sold 8400 membership units private placement, offered and sold undivided co-ownership real estate investment interests, TIC interests in two other real estate properties which were general solicitations disqualifying the company from any securities registration exemption. FINRA found that the offer and sale of those securities by Sigma Financial violated Section 5 of the Securities Act of 1933, and that it failed to supervise its registered representatives to prevent violation of SEC and NASD rules. As a result, FINRA concluded that such acts, practices and conduct also constituted separate and distinct violations of NASD Conduct Rules 2110 and 3010 by the member firm and imposed a censure and fine of $20,000.
*Above are only some of the regulatory disciplinary actions filed against Sigma Financial by FINRA. There are at least 10 more FINRA, NASSA and other state securities regulator investigations and enforcement actions reported as BrokerCheck disciplinary proceeding disclosures.
Sigma Financial Customer Complaints
There have been scores of customer complaints filed against Sigma Financial stockbrokers and investment advisors over the years. We have launched many investigations of current and former Sigma Financial advisors:
If you have lost money investing with any of these Sigma Financial 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 Sigma Financial Corporation 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 Sigma Financial Corporation 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. Sigma Financial 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 Sigma Financial without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By Sigma Financial Corporation 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 Sigma Financial 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.