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The
Financial Industry Regulatory Authority said Friday that
Caldwell International Securities Corp's (CISC) principal Greg
Caldwell would also be fined $50,000 and barred from acting as a
principal in another securities business.
Greg Caldwell could not be reached for comment.
CISC started in firm president Lennie Freiman's home in Fisher,
Texas, and grew to include nine branches and 20 registered
advisers in New York, New Jersey, Illinois, Florida and Nevada.
FINRA alleged in its complaint that the firm's management failed
to develop and enforce a supervisory system as it expanded,
which allowed many advisors to recommend unsuitable trades that
they did not understand to clients.
Caldwell and other senior managers knew about the inappropriate
investment strategies but did nothing to stop them, even as
clients called to complain, according to the settlement
agreement.
Fifteen clients paid over $1 million in fees and commissions to
CISC advisers as a result of the inappropriate investment
strategies, FINRA said in the complaint.
Caldwell and its senior executives accepted the offer without
admitting or denying the allegations made by FINRA.
(Reporting by Elizabeth Dilts; Editing by James Dalgleish)
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