Laidlaw and Company: 5 Regulatory Sanctions, 2 Customer Complaints

Laidlaw & Company

Publicly available records published by the Financial Industry Regulatory Authority (FINRA) and accessed on May 8, 2019 indicate that UK-based brokerage firm Laidlaw & Company, also known as Sands Brothers International, has received customer complaints and regulatory sanctions. Fitapelli Kurta is interested in speaking to investors who have complaints regarding Laidlaw & Company (CRD# 119037).

Founded in 1999, Laidlaw & Company received SEC approval in 2002, is headquartered in London, England, and is registered with 53 US states and territories. According to its BrokerCheck report, it has received five regulatory sanctions and two customer complaints that evolved into arbitration.

In 2018, FINRA sanctioned the firm in connection to allegations it failed in its supervisory duties concerning the recommendation of non-traditional exchange-traded funds. FINRA’s findings state specifically that the firm’s supervisory procedures lacked a system that was reasonably designed to ensure personnel reviewed non-traditional ETF transactions or review open positions in non-traditional ETFs so as to determine whether they had been held for long periods of time or resulted in unrealized losses. FINRA’s findings stated that firm representatives solicited 869 non-traditional ETF purchases and 946 non-traditional ETF sales across 312 customer accounts. According to FINRA’s findings, firm written supervisory procedures failed to require firm supervisors to “review open positions in non-traditional ETFs held for extended periods or resulting in unrealized losses,” and additionally failed to impose “product-specific limitations” on the firm’s representatives’ ability to recommend that customers trade in or hold positions in non-traditional ETF products. It was censured and issued a $25,000 fine.
designed to comply with relevant laws, regulations and rules.

In 2017 a customer alleged Laidlaw & Company churned investments, committed fraud, made unsuitable investment recommendations, and failed in its supervisory duties. The complaint resulted in an award to the customer of $25,000.

In 2016 FINRA sanctioned the firm in connection to allegations it charged unfair and unreasonable commissions on certain trades. FINRA’s findings stated specifically that the firm charged commissions as well as a “handling fee” on some trades, and that neither were fair nor reasonable. It was censured and issued a fine of $10,000; it was also ordered to pay more than $27,700 in restitution to affected customers.

In 2012 FINRA sanctioned the firm in connection to allegations it failed to create and enforce policies and adequately designed to comply with the Bank Secrecy Act. According to FINRA’s findings, the firm did not establish adequate policies and practices to identify and report suspicious activity; despite a requirement that firms maintain anti-money laundering compliance programs, FINRA found, Laidlaw & Company’s independent tests in 2007 and 2008 “were inadequate in that they consisted mainly of a summary of the AML written procedures without any information regarding any testing of the procedures.” FINRA’s findings go on to state that the firm did not maintain adequate WSPs concerning the retention of business-related emails which its representatives sent from a certain Bloomberg terminal; that it failed to file certain information concerning its receipt of customer complaints; that it filed incorrect information for complaints and claims it received; that it did not file information concerning certain settlement agreements and/or closed arbitration complaints; and that a brochure it created and distributed concerning certain hedge fund and alternative investments failed to “provide a sound basis for evaluating facts, reflect the uncertainty of the rate of return… disclose certain risks, be approved by a supervisor, and contain required language regarding” investor protections. FINRA’s findings state that the brochure in question additionally included “misleading and exaggerated statements,” and that it implied the firm “traces its history” to a company founded in 1842 with the same name, although Laidlaw & Company bought the name in 2004. It was censured and issued a fine of $65,000.

In 2009 FINRA sanctioned the firm in connection to allegations it failed to retain emails concerning firm business that were sent to and from “non-firm” email accounts maintained by representatives, and additionally that the firm failed to create and enforce a supervisory system governing non-firm emails. FINRA’s findings also state that the firm, through one of its registered principles, failed to create a privacy policy or provide its customers with privacy notices, as per securities regulations. The firm also allegedly failed to “maintain new account documents for some accounts” while maintaining incomplete client data for other such documents, and failed to enforce procedures regarding “the dissemination of a privacy policy and the maintenance of complete new account forms.”It was censured and ordered to pay a fine of $65,000.

In 2009 the State of Connecticut sanctioned the firm in connection to allegations it failed to comply with the requirements of an earlier consent order that it file periodic and accurate concerning disciplinary matters involving a certain representative who had been the subject of a disciplinary action. That representative, Martin Sands, was sanctioned in 2004 by the State of Connecticut in connection to allegations he had been subject to a 2003 bar and a 2000 suspension by the New York Stock Exchange; he was placed on conditional registration and his securities-related activities were restricted in that action. In 2010 Mr. Sands was sanctioned by the SEC in connection to allegations his investment adviser firm failed to comply with record-keeping and other Advisers Act provisions; he was censured and ordered to cease-and-desist in that action. In 2014 the SEC again sanctioned Mr. Sands in connection to allegations that he, as co-chairman of his firm, aided and abetted its violations of the Advisers Act’s custody rule by “failing to implement any procedures or safeguards to ensure compliance”; he was issued a 12-month suspension and a fine of $1,000,000 in that action. And in in 2000 the New York Stock Exchange Division of Enforcement sanctioned him in connection to allegations he failed to reasonably discharge his duties and supervisory responsibilities as the co-chairman of Sands Brothers & Company’s board of directors. He was censured and issued a fine of $50,000. In connection with the 2009 State of Connecticut action, Laidlaw & Company was issued a cease-and-desist order and a fine of $50,000.

That representative, Martin Sands, has himself received more than a dozen resolved or pending customer disputes. In 2004, for instance, a customer alleged that while employed at Sands Brothers & Company, he committed fraud, churned investments, fraudulently misrepresented and omitted material facts, recommended unsuitable investments, unjustly enriched himself, and breached his fiduciary duty. The complaint settled for $150,000. In 2002 a customer alleged Martin Sands, while employed at Sands Brothers & Company, failed to follow instructions and recommended unsuitable investments. The complaint settled for $575,000. In 2003 a customer alleged Martin Sands, while employed at Sands Brothers & Company, committed fraud, breached his fiduciary duty, converted and misappropriated customer funds, and committed securities fraud. The complaint resulted in an award to the customer of $2,150,000.

In 2009 a customer alleged Laidlaw & Company acted negligently, failed in its supervisory duties, and made unsuitable investment recommendations. The complaint resulted in an award to the customer of more than $297,000.

If you or someone you know has lost money investing with Laidlaw & Company, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.