Triad Advisors Fined $705K by FINRA for Failure to Supervise Which Resulted in Sales of Now-Defunct Risky Alternative Investments

INVESTORS: FINRA fined Triad Advisors $705k for failure to supervise which resulted in sales of now-defunct risky alternative investments, including investments in LJM Preservation & Growth Fund.

Registered representatives from Advisor Group’s Triad Advisors reportedly sold over $2.3 million in shares in the LJM Preservation & Growth Fund, causing 58 investment clients to lose hundreds of thousands of dollars. LJM shut down in 2018 after losing 80% of its value, “due to an extreme volatility event.”  FINRA’s investigators found that Triad allowed the sale of investments in LJM without conducting reasonable due diligence and without a sufficient understanding LJM’s risks and features.FINRA alleged that Triad Advisors failed to supervise a risky alternative product any differently than a traditional mutual fund. 

FINRA reported that a single, unidentified Triad representative sold approximately $1.7 million in LJM shares to 37 clients from September 2016 until February 2018, when LJM shut down. The issuer for LJM is currently embroiled in lawsuits against the SEC and Commodity Futures Trading Commission over allegations that LJM misled investors.

Without admitting or denying FINRA’s findings, Triad Advisors consented to sanctions in the form of:

• A censure;
• A certification signed by an officer and registered principal of the firm that, as of the date of the certification, Triad has established and implemented policies, procedures, and internal controls reasonably designed to address and remediate the issues;
• A $195,000 fine; and
• Restitution of $510,256.57, plus interest.

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The Sonn Law Group is currently investigating allegations surrounding recommendations in shares of LJM Preservation & Growth Fund. 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.