SEC Takes First ‘Reg BI’ Action Against California Broker

By Al Barbarino (June 16, 2022, 4:27 p.m. EDT) — The U.S. Securities and Exchange Commission said Thursday that California-based broker-dealer Western International Securities Inc. sold more than $13 million worth of debt securities to high-risk pensioners and others whose risk profiles did not match the investments, a first-of-its-kind enforcement action alleging breaches of regulatory best interests.

Between July 2020 and April 2021, Western and five of its registered brokers recommended and sold the total of $13.3 million in so-called L bonds to retail clients with “moderate risk tolerance”, although the material marketers of the bonds said they were “high risk”. “and only suitable for clients with substantial financial resources, according to the SEC complaint….

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