Finding a broker or financial advisor you can trust may, at times, seem a daunting task.
That’s especially true when investors see sensational stories of brokers fleeing the police in an underwater getaway or faking their death in an airplane crash. Then there are the high-profile fraudsters such as Bernie Madoff, who masterminded the nation’s biggest investment fraud in history — a Ponzi scheme that cost tens of thousands of investors up to $65 billion.
And there are, of course, less sensational but still notable events. The Securities and Exchange Commission charged a brokerage — Western International Securities Inc. — and five of its brokers on Thursday with violating a new rule that aims to raise investment-advice protections for consumers.
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The brokers allegedly sold more than $13 million of high-risk, unrated bonds to retirees and others, despite the bonds being inappropriate for these investors due to their illiquidity and speculation, according to the SEC release. The brokerage didn’t respond to a request for comment.
It’s the first time the SEC has filed a lawsuit in connection with Regulation Best Interest, which the federal agency issued in 2019 and firms had to comply with by June 2020. Overall, the rule generally requires brokers and firms to put a client’s interests…
