Brokerage Firm Review: Western International Securities

Western International Securities, Inc. (“Western International Securities”) (CRD# 39262) 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 Western International Securities, 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 Western International Securities, 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 Western International Securities?

If you’ve lost money caused by Western International Securities and/or its employees’ misconduct then the answer is, YES, you can sue Western International Securities 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 Western International Securities in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Western International Securities is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Western International Securities?

Western International Securities (CRD# 39262) 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, Western International Securities 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.

Western International Securities Has Many Different Regulatory Problems 

Western International Securities’ rapid growth has not been without consequences. There have been approximately 18 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 hundreds of customer complaints filed against Western International Securities 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. Western International Securities is a repeat offender: there are over 18 FINRA-reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Western International Securities Has Faced Over the Years*

Western International Securities 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:

Western International Securities, Inc. Faces FINRA Sanctions for Non-Traded REIT Regulatory Violations

Brief Overview: Western International Securities, Inc. has consented to FINRA sanctions without admitting or denying findings that it failed to establish, maintain, and enforce a supervisory system for non-traded real estate investment trusts (REITs). The firm’s written supervisory procedures (WSPs) were found inadequate in ensuring compliance with suitability obligations related to non-traded REIT recommendations. Notably, the WSPs lacked specific guidance for supervisors, leading to inconsistent assessments of suitability, primarily relying on customer and broker representations. The firm received censure, a $400,000 fine, and was ordered to pay $471,401.57 in restitution to affected customers. Moreover, the firm must certify the implementation of enhanced supervisory systems and procedures for non-traded REIT sales and disclosure obligations. Partial restitution equivalent to the commissions received by the firm was provided to customers, and the fine was settled in full on November 16, 2022.

Western International Securities, Inc. Faces Regulatory Penalties for Option Position Limit Violation

Brief Overview: Western International Securities, Inc., without admitting or denying the findings, consented to sanctions and findings that it had executed opening transactions in a stock option contract on behalf of a customer, leading to the customer holding a position exceeding the applicable position limit for four consecutive business days. The findings revealed that the firm failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to ensure compliance with option position limit requirements. The firm had no reporting mechanism to identify position limit overages and relied on its clearing firm for such notifications. Additionally, the WSPs lacked a description of a supervisory review process to determine if the firm or its customers exceeded option position limits. Subsequently, the firm updated its WSPs to address these deficiencies. As part of the sanctions, the firm received a $400,000 fine and was required to provide restitution and partial restitution totaling $471,401.57.

Western International Securities, Inc. Faces FINRA Sanctions Over Non-Traditional ETFs Supervision

Brief Overview: Western International Securities, Inc. has consented to FINRA sanctions without admitting or denying the findings, acknowledging its failure to establish, maintain, and enforce a supervisory system and written supervisory procedures (WSPs) designed to ensure that recommendations made by registered representatives concerning leveraged, inverse, and inverse-leveraged Exchange-Traded Funds (non-traditional ETFs) complied with applicable securities laws and regulations, as well as FINRA rules. The firm lacked written policies and procedures addressing the unique features and risks associated with non-traditional ETFs and had no effective system to monitor the peculiar risks posed by these products, especially the risk related to long-term holding of a product that resets daily. Furthermore, the firm did not perform a suitable reasonable basis analysis of non-traditional ETFs before offering them to retail customers and, in some cases, recommended these products to conservative customers with modest financial situations, including some elderly clients, resulting in unsuitable purchases. As part of the sanctions, Western International Securities, Inc. was censured, fined $125,000, and ordered to pay $521,098.10 in restitution to customers, with fines paid in full on March 20, 2018.

Why Does Western International Securities 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 Western International Securities 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. Western International Securities 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 Western International Securities without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Western International Securities 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 Western International Securities 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.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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