WestPark to Acquire Some Newport Coast Securities Reps

A majority of these representatives may have official complaints filed against them

WestPark Capital Inc. is set to acquire some of 109 registered financial representatives from Newport Coast Securities, a small, independent broker-dealer based in Irvine, CA. It’s notable that 63% of Newport’s representatives have at least one “disclosure event” on their Financial Industry Regulatory Authority (FINRA) BrokerCheck reports, which, in most cases, means that an official complaint has been filed against them.

WestPark hires Newport reps with multiple disclosure events

While WestPark’s CEO has said that the company is “doing normal due diligence” on potential personnel from Newport, some of the 15 brokers who have moved to WestPark thus far have up to four disclosure events on their records. Additionally, multiple Newport candidate reps have large numbers of judgements as well as tax-liens against them – it remains to be seen if any of these reps will officially join WestPark.

What is WestPark’s history in the financial industry?

In 2010, the Financial Industry Regulatory Authority (FINRA) ordered WestPark Capital to pay $400,000 in fees for failing to supervise brokers with a history of disciplinary actions, including claims of account churning and engaging in unauthorized and unsuitable trading. The sanctions included a $100,000 fine and $300,000 in restitution to clients. FINRA also barred two of the company’s brokers and a branch manager due to a history of misconduct.

After reviewing the records of WestPark’s brokers, FINRA investigators also discovered that many of them had a history of working for fraudulent investment firms. These including Salamon Gray, Inc, a Texas brokerage firm which FINRA expelled from the securities industry in 2006, as well as Stratton Oakmont, Inc., a company run by disbarred ex-convict Jordan Belfort and made famous in Martin Scorsese’s blockbuster The Wolf of Wall Street.

Account churning, unauthorized trading, and unsuitable trading

Account churning occurs when unscrupulous brokers excessively trade a client’s investments to make additional commissions on each trade. Brokers engage in unauthorized trading when they trade securities without a client’s knowledge or permission, and unsuitable trading occurs when brokers recommend or purchase securities that do not fit with a client’s investment goals or financial situation – it usually involves investments with an inappropriate level of risk or needlessly expensive financial products.

Conduct due diligence on a potential broker and financial advisory firm

It’s essential to check the history and reputation of any broker or brokerage firm that you’re interested in investing with by doing online research, including reading review websites and using tools like FINRA’s free BrokerCheck. It’s also a good idea to consult friends, family, and trusted professionals about a potential broker or firm, and ask brokers and advisers at the firm in-depth questions about their policies and how they plan to invest your money.

When investors have suffered losses due to the misconduct of a financial advisor or brokerage firm, their avenue to loss recovery is through securities arbitration. Silver Law Group is a nationally-recognized securities arbitration law firm representing investors worldwide. We work on a contingency fee basis to recover investment losses caused by broker misconduct. Contact us today for a free consultation with one of our experienced securities arbitration attorneys.