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Newbridge Securities Corporation: Investors Warnings and Alleged Rule Violations

Securities Lawyer Jonathan Kurta
By: Jonathan Kurta Author

Newbridge Securities Corporation (CRD #: 104065) is a brokerage and advisory firm with headquarters in Boca Raton, Florida. The firm works with retail investors as well as corporations. It also does business under the name Ludwig Investments.  

Brokers who have lost money after working with Newbridge Securities Corporation should keep reading–our securities lawyers may be able to help you.

Can I Sue Newbridge Securities Corporation?

Yes, but the investors and brokerage firms typically go through FINRA arbitration rather than suing in civil court. FINRA arbitration is designed to be cheaper and less time-consuming than a civil case. Instead of a judge and jury, the plaintiff and the respondent select a panel of neutral FINRA arbitrators.

FINRA arbitration has its critics, and many have questioned the neutrality of arbitrators. Investors often have no choice, as investment contracts usually feature a pre-dispute arbitration clause. In any case, a securities lawyer may be a helpful resource during the arbitration process. Our attorneys offer free case evaluations and do not collect a fee unless you win your case.

What Products Does Newbridge Securities Corporation Offer?

Newbridge offers the following products:

In addition, Newbridge Securities Corporation also offers alternative investments. The following investments are riskier and often unsuitable for everyday investors:

Securities Lawyer Jonathan Kurta
Written by: Jonathan Kurta

Jonathan Kurta is an accomplished securities attorney and a founding partner at Kurta Law.

Newbridge Securities Corporation and Alleged Violations of Regulatory Rules

Investors should know the regulatory actions on Newbridge Securities’ record, including those that involve an alleged failure to supervise their brokers’ recommendations of structured products. Read the complete list of regulatory actions in the firm’s detailed BrokerCheck record.

Alleged Failure to Follow Contingency Offering Rules

According to an Acceptance, Waiver, & Consent agreement (AWC) dated November 12, 2021, Newbridge violated Exchange Act Rule 10B-9 and did not follow requirements for contingency offering rules. The firm allegedly failed to return investor funds when a minimum contingency amount was not met, per the terms of the offering memorandum. As part of the terms of the AWC, the firm consented to a fine of $30,000.

Failure to Supervise: Structured Products and Non-Traditional ETFs

On September 26, 2019, Newbridge consented to the findings that they failed to supervise the recommendations of complex securities called structured products. You can read a copy of the AWC here.

Structured Products

Structured products are complex investments that combine a bond with a derivative. Derivatives are investments that derive their value from an underlying asset, such as a forward or an options contract. Brokerage firms and registered representatives should only recommend structured products if they are suitable for the investor’s risk tolerance.

Leveraged, Inverse Exchange Traded Funds (LIETFs)

The AWC also alleged that the firm failed to supervise the sale of leveraged, inverse exchange-traded funds, also known as non-traditional ETFs (NT-ETFs). Their system allegedly failed to detect prohibited NT-ETF sales and failed to perform their due diligence before recommending them.

The firm was censured, consented to a fine of $225,000, and was required to engage an independent consultant.

Pennsylvania Structured Products

There is an earlier dispute on its record that mentions structured products. According to a dispute filed on July 18, 2017, Newbridge failed to reasonably supervise one agent in connection with sales of structured products in Pennsylvania. FINRA Rule 3110 requires firms to supervise their registered representatives to ensure they comply with securities regulations.

As part of the Consent Agreement, Newbridge agreed to pay $499,000.

A close-up view of a Wall Street street sign.

Newbridge Securities Conflict of Interest

Newbridge discloses its conflicts of interest in the Customer Relationship Summary form. It states, “Conflicts may result in you paying more for investments than you would if the conflicts did not exist.” The Form CRS also includes information about fees for its advisory services, which are separate from its brokerage account fees.

Brokers should always inform you when these conflicts of interest exist. If they do not, you may have a case for a securities attorney.

  • Newbridge charges transaction-based fees. This creates an incentive for brokers to encourage their clients to execute more transactions.
  • Investments like mutual funds include “trails”–ongoing payments made to the brokerage firm–which create a conflict of interest for the broker.
  • Newbridge earns more when they buy and sell securities from their own accounts, creating an incentive to encourage you to buy and sell Newbridge securities.

Which Products Might Create a Conflict of Interest?

According to their Regulation Best Interest Disclosure Supplement, Newbridge has a financial incentive to recommend certain products.

Those certain products include the following:

Fees Newbridge Investors May Pay

Investors should ask their brokers how much their fees could affect any returns on their investments.

Newbridge discloses the following fees:

  • Wire Transfer Fees
  • Inactivity Fees
  • Account Transfer Fees
  • Error Correction Fees
  • Account Maintenance Fees
  • Certain investments may come with surrender charges.

Read a complete list of fees in the Newbridge Securities Fee Schedule.

Newbridge Securities Brokers

If you lost money with any of the following brokers, contact one of our securities attorneys. All of these brokers are registered with Newbridge Securities or have registered there in the past 15 years.