Commonwealth Financial Network (CRD#: 8032), a brokerage firm headquartered in Waltham, Massachusetts. This firm is licensed to operate in 53 U.S. states and territories.
Here, our investor protection team has detailed a few notable investor complaints and regulatory sanctions that have been brought against Commonwealth Financial Network.
FINRA Disclosures: Commonwealth Financial Network
In October of 2015, FINRA investigators determined that Commonwealth Financial Network was systematically overcharging its customers. Specifically, clients who were purchasing certain types of Unit Investment Trusts (UITs) were being denied available discounts in transaction fees. For the misconduct, FINRA fined the brokerage firm $225,000 and ordered it to pay $357,521.04 in financial restitution.
According to FINRA, Commonwealth Financial Network acted negligently, relying on its representatives to ensure that customers were given proper discounts, yet the firm failed to give sufficient training to these representatives.
Over-concentration of Investment Products
In May of 2013, the Massachusetts Securities Division initiated a legal case against Commonwealth Financial Network. The agency accused the broker-dealer and its individual representatives of selling non-traded Real Estate Investment Trusts (REITs) to investors in levels that exceeded the state’s maximum concentration limit.
Non-traded REITs are very risky investment products. As such, investors holding this type of product need to ensure that they are properly diversified within their brokerage account.
Commonwealth Financial Network was fined $300,000 and ordered to pay full restitution to any investors who sustained financial losses due to the broker’s negligence. If you lost money because your financial adviser did not properly diversify your holdings, you are entitled to compensation.
Failure to Supervise Individual Brokers
Above all else, registered brokerage firms have a legal responsibility to look out for the best interests of their clients. As part of this legal duty, firms must ensure that they have a proper system in place to supervise all of the brokers that they employ.
In March of 2014, FINRA’s Department of Enforcement determined that Commonwealth Financial Network had failed to live up to this basic professional obligation. The firm did not have an adequate system in place to review and preserve broker emails, as is required by industry standards and by FINRA Rule 3110.
It is imperative that emails and other correspondence is preserved so that investors have access to that information should they need it in the future. As a result of the negligence, the brokerage firm was fined $250,000.
At Sonn Law Group, our dedicated securities fraud lawyers have helped many wronged investors obtain full compensation for their financial losses. Call us today at 844-689-5754 to request a free review of your legal claim. We operate on a no-recovery, no-fee basis, meaning our firm only gets paid if we win or settle your case.