LFA—Failure to Adequately Supervise the Activities of a Registered Rep

investment fraud attorneysLFA Allegedly Failed to Adequately Supervise a Registered Rep Who Purportedly Engaged in Unsuitable Penny Stock Trading

LFA allegedly failed to adequately supervise a registered rep, known only as PT, who supposedly engaged in unsuitable penny stock trading, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC).

PT also allegedly placed over 1,700 penny stock orders in connection with at least 15 customers, which he marked unsolicited but many of which appear to have been solicited, the AWC notes.

What is more, LFA also allegedly failed to supervise PT as he allegedly recommended penny stock transactions that were unsuitable because they led to overconcentration of penny stocks in the customers’ accounts, and were contrary to their stated investment objectives, regarding four customers, the AWC reports.

LFA Censured and Fined $90K by FINRA for Failure to Adequately Supervise Reps

LFA, upon receipt of the first customer complaint in September 2011, allegedly suspended PT’s trading authority, and PT was terminated for violating LFA policy with respect to penny stock transactions in October 2011, the AWC reports.

Furthermore, from September 2011 through October 2012, LFA allegedly received 15 complaints relating to PT and LFA paid approximately $616,109 in settlements, the AWC notes. As a result of the aforementioned behavior, LFA has violated FINRA Rules, and has been censured and fined $90,000 by FINRA, the AWC notes.

One should also note that, according to the AWC, LFA neither admitted nor denied the FINRA findings.

The Peiffer Rosca Wolf Securities Lawyers Often Assist Investors

The Peiffer Rosca Wolf securities lawyers assist investors who lose money as a result of a lack of adequate supervision of registered reps. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of a lack of adequate supervision of registered reps are encouraged to contact the securities lawyers at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1180 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.