Investors should be informed about regulatory matters concerning brokers and investment firms. A recent case involving Traderfield Securities Inc. (CRD 20130) and Mario Divita has been noted for its relevance to investor protection. The case is under investigation by Haselkorn & Thibaut, a national investment fraud law firm with a strong record of financial recoveries for investors.
Case Background and Regulatory Findings
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The matter concerning Traderfield Securities Inc. and Mario Divita involves findings related to supervision systems, including Written Supervisory Procedures (WSPs). According to the findings, the firm and Divita were aware that two of the firm’s representatives were engaged in outside activities involving investment funds and private placement offerings. The findings indicate they did not fully evaluate these activities to determine whether they constituted outside securities activities.
The representatives reportedly raised $60 million from over 200 individual investors through investment funds they owned and managed. These activities were presented to the firm and Divita as Outside Business Activities (OBAs), indicating they were investment-related. The findings state that neither Divita nor the firm evaluated these proposed activities to determine whether they should be restricted or prohibited, or whether they should have been treated as outside securities activities.
The findings also noted that the firm’s WSPs did not reference or require compliance with the requirements of FINRA Rule 3270.01. The firm and Divita consented to the sanctions without admitting or denying the findings.
Understanding the FINRA Rule
In plain terms, the findings concerned the firm and Divita’s oversight of their representatives’ outside activities. The regulatory review found they did not evaluate whether these activities constituted outside securities activities, which could potentially affect the representatives’ responsibilities to the firm or its customers.
FINRA Rule 3270.01 requires firms to supervise their representatives’ OBAs. The rule aims to prevent conflicts of interest and protect investors. In this case, the findings indicated the firm’s procedures did not fully address this rule while representatives raised funds from individual investors through investment funds they owned and managed.
Importance for Investors
Investor protection is a central purpose of FINRA rules. When regulatory requirements are not fully met, it can potentially affect investors. In this situation, representatives raised $60 million from over 200 individual investors through investment funds they owned and managed. Proper supervision of these activities could have provided additional protections.
Investors benefit from understanding the oversight that applies to investment activities and the importance of broker supervision. When brokers and firms do not fully comply with FINRA rules, it may impact investor interests.
Warning Signs and Recovery Options
There are several indicators of potential concerns in financial advisory relationships. These include supervision issues, undisclosed conflicts of interest, and regulatory compliance matters. In this case, the findings related to supervision of representatives’ outside activities.
Investors who have experienced losses related to broker conduct may have options through FINRA arbitration. Haselkorn & Thibaut is investigating the case involving Traderfield Securities Inc. and Mario Divita. With over 50 years of experience and a reported 98% success rate, the firm offers free consultations and operates on a “No Recovery, No Fee” policy. Investors can contact the firm at 1-888-994-8066.
Investors are encouraged to be aware of investment risks and the importance of proper broker supervision. Being informed and seeking appropriate professional guidance when necessary can help investors protect their financial interests.
