The firm was ordered to improve its compliance practices regarding the purchase of securities on behalf of institutional investors.
The Sonn Law Group is investigating allegations that First Western Capital Management failed to supervise its representatives. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.
The SEC fined First Western Capital Management Co., an investment advisory firm located in Denver, Colorado, for “fail[ing] [to] reasonably supervise its investment adviser representatives” when it allowed them to purchase $666 million worth of securities for clients that were not qualified institutional buyers under Rule 144A of the Securities Act of 1933.
The SEC alleged that the firm, “failed to adopt and implement written policies and procedures reasonably designed to prevent violations of the Investment Advisers Act of 1940 and the rules thereunder by the adviser and its supervised persons.”
The order stated that First Western “willfully” violated the Investment Advisers Act because they failed to supervise with a view to prevent violations of the federal securities laws. These failures were allegedly caused by inadequate training, inefficient compliance policies and procedures, and a failure to establish policies that would prevent and detect such violations.
“For a period of time prior to 2017, First Western Capital Management misinterpreted Rule 144A of the Securities Act of 1933 and purchased, for client accounts, unregistered securities,” First Western Financial said in an emailed statement. ”The issue was discovered by First Western Capital Management during an internal review in 2017 and corrective measures were put in place at that time. A review of the impacted accounts showed no client accounts suffered financial harm.”
The firm was also censured and is subject to a cease and desist order on similar purchases, though the firm will not be required to admit to any wrongdoing.
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The Sonn Law Group is currently investigating allegations that First Western Capital Management failed to supervise its representatives. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.