Southwest Securities: Information for Investors

Southwest Securities Complaints For full information about Southwest Securities, please do not hesitate to access FINRA’s free BrokerCheck tool, and input the firm’s Central Registry Depository (CRD) number: 6220.

Investor Alert: Southwest Securities is Now Doing Business as Hilltop Securities

Established in 1991, Southwest Securities is headquartered in Dallas, Texas, and it is licensed to operate in all 50 U.S. states, as well as the District of Columbia and Puerto Rico.

In 2015, this firm was officially acquired by Hilltop Holdings. Immediately following the acquisition, Southwest Securities was renamed ‘Hilltop Securities’.

While this name change can make things more confusing for retail investors, it must be made clear that this is the same company.

The re-branding does not change the underlying nature of the firm, and it certainly does not make the firm immune from liability for any past misconduct. Indeed, Hilltop Securities is fully responsible for any negligence or fraud that may have been committed by Southwest Securities.

Can I Sue My Southwest Securities Financial Advisor?

Can I Sue My Financial Advisor
The answer is: Yes, you can sue your Southwest Securities financial advisor. You can file an arbitration claim to seek financial compensation when an advisor – or the brokerage firm they work for – fails to abide by FINRA’s rules and regulations and you suffer investment losses as a result.

Investment losses? Let’s talk.

Or, contact us online.

The History of Complaints Against Southwest Securities (Hilltop Securities)

Sold Municipal Bonds Below the Minimum Denomination

In May of 2016, Southwest Securities was censured and fined $40,000 for selling bonds below their minimum required denomination. Between the spring of 2014 and the spring of 2015, Southwest Securities facilitated 62 transactions that violated industry rules.

Specifically, the firm was charged with violating MSRB Rule G-15(F). This rule provides important protection for investors, as being put into an investment position that is below the minimum denomination will adversely affect a customer’s liquidity.

Made Material Misrepresentations to Investors

In February of 2016, the Securities and Exchange Commission (SEC) charged Southwest Securities with making misrepresentations to investors. The brokerage firm was fined $360,000 for its misconduct.

According to the SEC, Southwest Securities failed to conduct proper due diligence on municipal securities that it was offering to its clients. As a result of this negligent conduct, material misrepresentations were made to customers that adversely affected their financial position.

Conspired with a Client to Defraud Investors

In November of 2015, a Dallas, Texas jury entered a $5.5 million judgment against Southwest Securities. As was reported by The Dallas Morning News, the jury determined that Southwest had conspired with one of its clients, Stephen Jemal, in his effort to defraud at least eight other investors.

Indeed, the jury found that Southwest Securities had helped Mr. Jemal misrepresent how much money he had invested with them, thereby allowing him to induce investment for his own project and acquire commercial loans.

Evidence from the trial not only proved that the broker-dealer had provided Mr. Jemal with easily alterable statements, but that the firm had assisted Mr. Jemal in his effort lie to his investors.

Sold Securities to Customers at Unfair Prices

Registered brokerage firms owe fiduciary duties to their clients. This means that they have a professional obligation to put the best interests of their clients above the interests of the firm.

In 2013, Southwest Securities violated this obligation. According to FINRA’s Department of Enforcement, the firm sold securities from its own account to customers at unfair prices. FINRA investigators identified at least nine different transactions that violated industry rules.

As a result of this misconduct, Southwest Securities was fined $77,500 and ordered to pay full financial restitution to affected customers.

Engaged in Illegal Late Trading

In 2005, the SEC fined Southwest Securities $10,000,000 after it was discovered that the firm has engaged in an extensive (illegal) late trading scheme. Late trading is strictly prohibited by securities industry regulations. The term ‘late trading’ refers to the unlawful practice of putting in orders at/aftermarket close, but doing so based off of ‘stale’ prices.

Instead of getting the appropriate price (the price at the close of the next trading day), the firm was trying to get prices that put it at a huge advantage. Essentially, late trading means that certain investors are able to buy a financial product (usually a mutual fund) at a discount, thereby hurting other innocent investors.

Were You a Victim of Securities Fraud?

Our team can help. At the Sonn Law Group, our experienced securities fraud attorneys have extensive experience handling fraud and negligence claims against brokerage firms.

If you lost a substantial amount of money investing with Southwest Securities (Hilltop Securities), please call us today at 844-689-5754 to request your free initial legal consultation. From our offices in Florida and Houston, Texas, we served wronged investors nationwide.