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2014 Milestone Year for Big Regulatory Fines

Industry regulators handed out some hefty fines to financial firms in 2014, due to a variety of misdeeds and oversights. Here’s a list of the10 biggest fines handed out this year, presented in order of the fine amount, individual broker or adviser penalties are excluded.

  1. WFG Investments fined $700,000, for failing to commit the time, attention and resources to a range of critical obligations in its supervision of registered reps. More info. here.
  2. Berthel Fisher & Co. Financial Services Inc. fined $775,000, for failure to supervise the sale of alternative investments such as non-traded REITs and leveraged and inverse ETFs. More info. here.
  3. LPL Financial fined $950,000, for supervisory deficiencies related to sales of nontraded REITs, oil and gas partnerships, business development companies, hedge funds, managed futures and other illiquid investments. More info. here.
  4. Stifel Nicolaus & Co. and its subsidiary, Century Securities Inc. fined $1 million, for selling leveraged and inverse ETFs to customers for whom the investments were unsuitable, as well as the firms not having proper training or written procedures in place to make sure their advisers had an “adequate and reasonable basis” for recommending the products. More info. here.
  5. Morgan Stanley fined $1 million, for paying approximately $100 million in commissions to approximately 780 unregistered, retired brokers without properly ensuring they were no longer soliciting or advising. More info. here.
  6. 2 independent broker-dealers owned by Ladenburg Thalmann Financial Services Inc. fined $1.275 million, for failure to supervise hundreds of brokers who created and sent false and inaccurate consolidated account statements to clients. More info. here.
  7. Wells Fargo fined $1.5 million, for failing to properly vet some 220,000 new customer accounts by doing the necessary identity verification to comply with anti-money laundering requirements. More info. here.
  8. Bank of America Merrill Lynch fined $8 million, for failing to waive mutual fund sales charges for certain charities and retirement accounts. More info. here.
  9. Citigroup Inc. fined $15 million, for not adequately protecting against “potential selective dissemination of non-public research to clients and sales and trading staff.” More info. here.
  10. J.S. Oliver Capital Management fined $15 million, for breach of fiduciary duty and violations of securities laws via an alleged cherry-picking scheme that defrauded several clients out of about $10.9 million. More info. here.

More information on 10 of the biggest regulatory fines of 2014:

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