The Financial Industry Regulatory Authority censured and fined broker-dealer Financial West Investment Group, Inc., of Westlake Village, California, for failure to conduct reasonable diligence in determining the best inter-dealer market, resulting in what FINRA deems were unfair bond prices customers were made to pay. In addition to a $42,500 fine, the firm was ordered to pay $14,236.84, plus interest, in restitution to customers that were determined to be affected by the aforementioned violative conduct.
For its part, Financial West Investment Group, accepted the findings and consented to the discipline without admitting or denying any of the findings.
Specifically, FINRA charged the broker-dealer Financial West with purchasing municipal securities from a customer at an aggregate price FINRA believes was not fair and reasonable, given reasonable judgment of the securities' fair market value and several other expense/profit factors.
FINRA also found that Financial West failed to employ reasonable diligence with regard to determining the best inter-dealer market, accordingly failing to ensure favorable buying and selling prices for its customer, given prevailing market conditions. Additionally, it found that Financial West sold corporate bonds to customers at prices FINRA deems were unfair, given relevant circumstances such as market conditions and expenses involved.
In its determinations, FINRA found that Financial West violated several NASD and Municipal Securities Rulemaking Board (MSRB) rules, reiterating that firms are responsible for ensuring that prices for securities, such as municipal securities and corporate bonds, and the transactions' corresponding markets, are fair, reasonable and even favorable for the customer.
If you invested with Financial West Investment Group or another broker-dealer you believe has has set a security's price at unfairly high levels or charged execessive commissions and fees, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
