Alex Williams (CRD# 2646185), a broker and investment adviser based in New York, has received a pending customer complaint. According...Read More
Sean Waters: FINRA Barred Former Newbridge, Financial West Advisor
A disciplinary action taken by the Financial Industry Regulatory Authority against former Boca Raton, Florida and Los Angeles, California broker and investment advisor Sean Waters (CRD#) barred him over allegations of excessive and unsuitable trading. A former representative of Newbridge Securities Corporation and Financial West Group, Waters was barred from acting as a broker or otherwise associating with a broker-dealer firm.
According to a Letter of Acceptance, Waiver and Consent () dated November 2018, Sean Waters was associated with Financial West Group when, between January 2013 and March 2016, he executed “excessive” trading in a customer’s account “with a reckless disregard” for her interests. FINRA’s findings state that he became her representative in 2010, when she was 67 years old and transferred her retail brokerage account to the firm. In 2011, the customer’s husband passed away, and a year later she retired; at the time, according to FINRA, her social security benefits and savings became “her sole source of income,” with her net worth approximately $275,000 and her account’s value approximately $62,000. FINRA states that her investment objectives for her individual account and an IRA account she opened in 2013 were “capital appreciation and income, with a moderate risk tolerance.”
FINRA’s findings go on to state that Sean Waters held “de facto control” over the customer’s accounts during the period in question, and executed excessive trades in them. Specifically, he executed 423 trades in the individual account during the period in question, and 527 trades in the IRA account. These included, across the two accounts, 540 purchase transactions and 510 sale transactions; he also charged commissions and other fees of about $115,000. FINRA’s findings state that this trading activity included in-and-out transactions in a minimum of 48 securities in the individual account and 41 securities in the IRA account; FINRA describes in-and-out trades as indicative of excessive trading. Other indicators of excessive trading, according to FINRA, was an annualized turnover rate in the individual account of 7.20, with an annualized cost-to-equity ratio of 41.11%; as for the IRA account, those figures were 7.23 and 39.85%. According to FINRA, “[a] turnover rate of six or a cost-to-equity ratio in excess of 20% generally indicates that excessive trading has occurred.”
This trading activity led to cumulative losses for the customer of “more than $88,000… out of the $150,000” she originally transferred to the firm, according to FINRA, while the commissions and other fees generated for Waters were about $115,000. FINRA states further that his trading activity was inconsistent with the customer’s investment profile, and that it recklessly disregarded her interests. FINRA found that his activity constituted violations of securities law and industry rules. As a result of the foregoing alleged conduct, he was barred from associating with any FINRA member in any capacity.
Sean Waters is not currently registered as a broker or investment advisor. His employment history includes Newbridge Securities Corporation in Boca Raton, Florida; Financial West Group in Los Angeles, California; Arque Capital, Southwest Securities, ML Stern & Company, UBS Financial Services, and Morgan Stanley DW. He currently holds no state licenses and has passed three securities industry qualification examinations.