Laura Barnes Involved in SEC Regulatory Action
Laura Barnes (CRD #: 4482198), a broker registered with Moloney Securities, is facing an SEC investigation, according to her BrokerCheck record, accessed on November 22, 2024. Keep reading to learn more about her alleged conduct as a broker.
SEC Regulatory Action
On September 27, 2024, the Securities and Exchange Commission filed a regulatory action against Moloney Securities Company, Laura Barnes, Donald Hancock, and David La Grange, alleging failure to comply with Regulation Best Interest in connection with recommendations of L Bonds offered by GWG Holdings between June 30, 2020, and approximately January 15, 2022.
The SEC alleged that GWG Holdings disclosed that L Bonds were high-risk, potentially speculative, illiquid, and only suitable for investors with significant financial resources. GWG Holdings allegedly also stated that it would use a portion of the proceeds from L Bonds to repay existing bond holders. Further, the company allegedly disclosed factors that raised doubts about its ability to continue as a going concern in November 2021.
Moloney Securities Company and Laura Barnes allegedly recommended L Bonds to clients without a reasonable basis to believe that these investments were in the investors’ best interests based on their investment profiles. The SEC alleged that these defendants also failed to exercise the diligence, care, and skill required under Regulation Best Interest with regard to understanding the risks, costs, and potential returns associated with L Bonds.
Further, the firm allegedly failed to establish supervisory procedures reasonably designed to identify, disclose, manage, or eliminate conflicts of interest associated with its investment recommendations, and failed to disclose the conflicts of interest created by the recommendation of L Bonds by its CEO and other employees who personally owned GWG Holdings securities.
The firm allegedly also failed to establish and enforce supervisory procedures designed to achieve compliance with Regulation Best Interest.
The SEC alleged that Laura Barnes, Donald Hancock, and David La Grange failed to comply with the Care Obligation and willfully violated the General Obligation of Regulation Best Interest, and that Moloney Securities Company willfully violated the General Obligation of Regulation Best Interest.
What is Regulation Best Interest?
Regulation Best Interest expanded on the requirements of FINRA Rule 2111, which defines suitable investment recommendations. In addition to limiting their recommendations to investments that suit their investors’ needs, brokerage firms must also uphold a Duty of Care, a Conflict of Interest Obligation, and a Disclosure Obligation. These obligations and duties require brokerage firms to disclose conflicts of interest and, prior to recommending an investment, research the market for investments that could offer similar benefits at a lower cost.
Sanctions
Laura Barnes was ordered to cease and desist from future violations of Regulation Best Interest and to pay the following:
- $12,500 fine
- $12,744 disgorgement
- $1,754 penalty
Background Information
Laura Barnes has passed the following exams:
- Series 66 Uniform Combined State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 General Securities Representative Examination
She is a registered broker in Iowa.
Laura Barnes has also worked with Eagle One Investments (CRD #: 45254).
Kurta Law Can Help
If you worked with Laura Barnes and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.