Texas Securities Fraud: State Fines The Investment Center and A Local Man Is Accused of Bilking Investors
A New Jersey financial firm must pay $50,000 in Texas for allegedly not properly supervising one its brokers who loaded up too many energy stocks in his clients’ accounts. The Investment Center Inc. has been reprimanded by the Texas State Securities Board, which also imposed the fine.
It was an investor that brought the Texas securities case against the securities dealer and one of its ex-brokers. According to the state regulator’s consent order, between ’10 and ’14, some clients at The Investment Center held 95% of total investible assets in energy sector equities. The recommended securities were typically low-priced and publicly traded. There were purportedly periods when some clients’ accounts were invested in just one company instead of holding investments in different energy companies at the same time. Also, said the state regulator, with certain clients, their equity positions were 100% concentrated in the energy sector.
The Texas State Securities Board said that clients that could not sustain a lot of risk were among those affected by this broker’s investment choices.
Although the former financial representative’s actions in investing so much of his clients’ money in concentrated equity positions raised red flags when some of these accounts dropped in value, The Investment Center purportedly failed to act on the warning signs. The firm has since paid the investor who filed the Texas securities fraud complaint $98,000.