The Financial Industry Regulatory Authority (FINRA) has fined Newbridge Securities Corporation for failing to reasonably supervise recommendations for margin use by two representatives in five customer accounts.
From July 2015 through June 2020, Newbridge failed to reasonably supervise two registered representatives in one former branch office who recommended unsuitable margin use in five customer accounts.
The customers were not experienced or sophisticated investors and did not understand the extent to which margin was used in their accounts, or the costs associated with the margin use. The recommended extensive use of margin in the customers’ accounts allowed the customers to purchase more securities than they could have if they had paid for the securities in full, which in turn led to more commissions for the representatives.
In each of the five accounts, the recommendations resulted in month-end margin balances…
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