On October 8, 2019, former Securities America, Inc. financial advisor, Jaime Michael Westenbarger (CRD# 4625703), was barred from associating with any FINRA-member broker-dealers or other affiliated persons. Pursuant to a Letter of Acceptance, Waiver and Consent (AWC), Mr. Westenbarger consented to the industry bar without admitting or denying any wrongdoing, following his alleged failure to cooperate with a FINRA Enforcement investigation requesting certain documents and information. As set forth in the AWC, FINRA’s investigation concerned allegations that Mr. Westenbarger had impermissibly received customer funds through a purported lending arrangement with some of his clients.

Mr. Westenbarger first entered the securities industry as a stockbroker in 2003. Most recently, from May 2016 until his termination from employment in September 2019, he was affiliated with Nebraska-based Securities America as a dually registered stockbroker and investment adviser. Mr. Westenbarger was the founder of his own financial advisory firm, Forest Hills Financial, through which he was affiliated with the independent broker-dealer, Securities America.

According to FINRA BrokerCheck, Mr. Westenbarger has disclosed a total of eight customer disputes over the course of his career, including three disputes which remain pending as of this writing. Of concern, the two most recently initiated customer disputes involve allegations that Mr. Westenbarger purportedly engaged in fraud, conversion and/or embezzlement, and breach of fiduciary duty, in addition to violations of the Michigan Uniform Securities Act.

At the state level, Michigan securities regulators entered into a Consent Order with Mr. Westenbarger on March 31, 2020. Under the terms of the Consent Order, Mr. Westenbarger agreed to pay a $1,500 administrative fine, and further, to cease and desist from “conduct[ing] any business in Michigan regulated under the Securities Act….”

Under applicable FINRA rules, brokerage firms like Securities America have a legal obligation to supervise their employees and affiliated representatives. Specifically, under FINRA Rule 3110 (NASD Rule 3010), firms like Securities America must “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance” with applicable FINRA rules, in addition to state and federal securities laws. It is critical for broker-dealers to not only establish such a supervisory system, but further to properly maintain their supervision, by among other things, periodically meeting with individual financial advisors to discuss the products they are selling and their sales methods, as well as to examine correspondence with customers.

In instances where a customer suffers losses due to an inappropriate, or even fraudulent investment, then the brokerage firm may be held liable for any failure to adequately supervise their employee. The attorneys at Giarrusso Law Group LLC have significant experience in working closely with investors to resolve all manner of issues concerning investment losses, including losses suffered due to misconduct or wrongdoing by a financial advisor. Investors may pursue a claim to recover monies through securities arbitration before FINRA, or in some instances, through litigation. Investors who wish to discuss a possible claim are invited to contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost, confidential consultation.