Monday, 22 May 2023 13:47

FINRA means business

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Seems the referee threw a flag.

Between January 2018 and December 2021, SW Financial, based in Melville, New York, and the co owner of the firm, Thomas Diamante, made material misrepresentations, neglecting to include material information linked with the sale of private placements offerings of pre-IPO securities, according to thinkadvisor.com. It was a duo violation; of FINRA rules and Reg Bi’s Disclosure Obligation as well.

According to Reg Bi’s Disclosure Obligation, it’s incumbent upon broker dealers – as well as those associated – to provide investor clients, “with full and fair written disclosure, prior to or at the time of a recommendation, of all material facts relating to conflicts of interest associated with the recommendation,” as spelled out by FINRA.   

Although it’s FINRA’s maiden expulsion, it’s not its first enforcement action evolving around Reg Bi, which has been around since 2020, according to the National Review.

By year’s end, FINRA pronounced, compliance examinations of 1,000 broker-dealers would be conducted.

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