A New York Stock Exchange arbitration panel awarded a California investor $3.1 million after finding a New York-based investment company made unauthorized trades and failed to protect a large stock position.
The investor, Jay Hoge, won $2.1 million in compensatory damages and another $1 million in punitive damages from Sands Brothers.
Hoge, a technology services employee, gave his money to Sands, which professed to be able to manage the funds and hedge the large position.
The firm improperly traded in Hoge’s account and failed to protect Hoge’s large stake in Finisar Corp., a California based technology company which had bought his firm with stock.
Sands’ Hoovers profile describes the firm as offering “an array of investment products and services to help the rich get richer.”
The Financial Industry Regulatory Authority (FINRA) is a non-governmental organization overseeing brokerage firms and their registered representatives in the United States. Established in 2007 through the merger of the NASD and the regulatory functions of the New York Stock Exchange, FINRA operates under the authority of the Securities and Exchange Commission (SEC). Its primary role is to ensure that the securities industry operates fairly and transparently, protecting investors and maintaining market integrity.
FINRA enforces rules and regulations governing the conduct of financial professionals and firms, conducting routine examinations and investigating potential violations. It also provides a platform for resolving disputes between investors and firms through its arbitration and mediation services. In addition, FINRA offers educational resources for investors to enhance their understanding of financial markets and products.
The organization plays a critical role in maintaining confidence in the financial system by promoting ethical behavior, implementing rigorous compliance standards, and fostering transparency. By overseeing a vast network of brokerage firms and individual brokers, FINRA helps ensure that investors are treated fairly and that financial markets operate efficiently and equitably.