Pershing LLC

Kurta Law is investigating securities recommendations from Pershing representatives. Investors who lost money after working with a Pershing broker may have a case for a securities attorney. Review your investment portfolio and contact us if you believe you suffered losses as a result of misconduct.

Background Information

Pershing LLC (CRD #: 7560) is a registered broker-dealer with headquarters in New Jersey. The Bank of New York Mellon Company is an indirect owner of Pershing that also serves Investment Advisor clients. Pershing LLC is a broker-dealer and is an affiliate of the advisory firm Pershing Advisor Solutions.

Investors should note that Pershing may also do business under the name Donaldson Lufkin & Jenrette Securities Corporation.

Regulatory Actions

Since registering with the SEC in 1973, Pershing has racked up 102 disclosures, which include regulatory actions and fines. The following are only the most recent – investors can find the complete list on the firm’s detailed BrokerCheck record.

Pershing Allegedly Failed to Correctly Mark OTC Transactions

On April 5, 2017, Pershing entered into an Acceptance, Waiver, and Consent agreement with the Financial Industry Regulatory Authority (FINRA). AWCs allow firms to consent to findings without admitting or denying the allegations. The AWC alleged the firm failed to correctly mark its over-the-counter transactions, which allegedly impacted the quality and usability of information received and employed by FINRA staff.

Pershing also allegedly did not provide supervision of its representatives reasonably designed to achieve compliance with certain securities laws and regulations. FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. This includes appointing supervisors and providing them with Written Supervisory Procedures (WSPs).

The firm consented to a fine of $80,000. You can read a copy of the AWC here.

Short Selling Allegations

Another AWC, dated July 26, 2016, alleges that Pershing entered into a short-sale order in an equity agreement without 1. Borrowing the security or entering into a bona fide arrangement to borrow the security, or 2. Having reasonable grounds to believe the security could be borrowed.

Short-selling is a type of options trading. In order to short a security, firms must first borrow the security that they are shorting. The seller then finds a buyer for the security. If the stock price goes down, they can repay the original owner of the stock the lower stock price, keeping the remainder for themselves.

This AWC also alleges that the firm failed to supervise. You can read a copy of the AWC here.

Broker Fees and Conflicts of Interest

Pershing charges fees, either per transaction or based on the amount of assets in the investment advisory services. The firm reveals more information about its fees and the conflicts of interest those fees create in its Customer Relationship Summary (Form CRS).

Proprietary Products

Pershing offers mutual funds that come with management and advisory fees. These fees create a conflict of interest.

Third-Party Payments

Certain investment product sponsors offer Pershing sponsorship fee payments, in addition to conferences, events, seminars, and workshops.

Revenue Sharing

Pershing received servicing fees from mutual funds, 529 plans, money funds, bank deposit sweeps, annuities, alternative investments, and exchange-traded funds. The firm therefore has an incentive to offer these products to customers.

Broker Misconduct

Pershing reveals in its Form CRS that certain employees have misconduct on their records. Be sure to ask your representative if they have any investor disputes on their BrokerCheck records.            

What Can I Do If I Lost Money Working with a Pershing Broker?

Review your account statements and look for the signs of broker misconduct. Consult with a securities attorney if you believe you may have a case. Our attorneys offer free case evaluations and do not collect a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.