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SW Financial: Conflicts of Interest and Brokers with Disciplinary Records

Securities Lawyer Jonathan Kurta
By: Jonathan Kurta Author
April 28, 2023 at 5:00pm

Did you lose money after working with SW Financial (also known as Saloman Whitney Financial)? SW Financial (CRD #: 145012) is a brokerage firm with headquarters in Melville, New York. Investors should be aware of the regulatory actions on the firm’s BrokerCheck record, which include allegations of misleading fees and unsuitable recommendations. Securities attorneys can help if you have lost money after working with a broker from SW Financial.

SW Financial also operates under the following names:

  • Saloman Whitney Financial
  • Saloman Whitney LLC

It has locations in New York and Florida.

According to its website, the firm offers the following services and products:

  • Mutual funds
  • Variable life insurance and annuities
  • Investment banking
  • Short-term stock trading
  • Portfolio management

SW Financial discloses that the firm offers a limited selection of investments and that other firms might offer a wider range of choices that come with lower costs.

Can I Sue SW Financial?

Yes, you can recover losses after investing with SW Financial. However, you may need to pursue FINRA arbitration rather than a civil lawsuit. Many investment contracts feature a pre-dispute arbitration clause that requires investors to use FINRA arbitration to obtain awards from their brokerage firms. Investors may have a claim if they suffered losses following broker fraud or misconduct. Our securities attorneys offer free case evaluations to help investors ascertain if they have a case.

Securities Lawyer Jonathan Kurta
Written by: Jonathan Kurta

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

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SW Financial Conflicts of Interest

SW Financial discloses its conflicts of interest in its Customer Relationship Summary (Form CRS). The Form CRS recommends that investors ask, “How might your conflicts of interest affect me, and how will you address them?”

  • The brokerage firm earns fees when investors execute transactions, so they are incentivized to encourage frequent trading.
  • SW Financial may be the dealer-manager or placement agent for certain financial products. The firm has an incentive to recommend these products.
  • Brokers might earn a concession or management fee if you purchase an alternative investment, such as a private placement.

SW Financial Broker Fees

SW Financial discloses the following fees in its Form CRS.

  • Transaction-based fees, also known as “commissions.”
  • Alternative investments may come with broker concession fees, management fees, and consulting fees.
  • Bonds have fees built-in to the price. These are typically referred to as “mark ups” or “mark downs.”
  • Certain investments – such as mutual funds and variable annuities – come with their own internal fees that can reduce the value of the investment.
  • Variable annuities could feature surrender charges.
  • Investors may be charged additional fees, such as custodian fees, account maintenance fees, and transfer fees.

Investors should know that these fees are different from advisory account fees–the Form CRS includes information about those fees as well.

Regulatory Actions

Investors should review SW Financial’s most recent regulatory actions. If you want to see the most up-to-date record of regulatory actions, you can access the firm’s detailed BrokerCheck record.  

Alleged Overpayment for Mutual Fund Fees

On February 27, 2018, FINRA alleged in an Acceptance, Waiver, and Consent agreement that the firm had failed to establish written supervisory procedures that would have protected investors from overpaying for mutual fund fees. Allegedly, an SW Financial broker recommended that a senior investor switch their funds to new mutual funds that did not suit the investor’s shorter investment horizon. Also, by purchasing mutual funds from different fund families, the investor allegedly did not receive the breakpoint discounts he was entitled to receive.

As part of the terms of the AWC, the firm consented to a fine of $35,000 as well as $49,687.44 plus interest in restitution to the customer.

Alleged Failure Concerning Non-Traditional Exchange-Traded Funds

According to an AWC filed on April 30, 2014, SW Financial failed to provide adequate training to its brokers regarding non-traditional exchange-traded funds (NT-ETFs). The firm’s general supervisory system allegedly was not sufficiently tailored to address the unique features and risks involved with these products. The firm also allegedly failed to re-evaluate the suitability of these products, in spite of the risks associated with NT-ETFs, including daily reset, leverage, and compounding.

Allegedly Misleading Fees

In another AWC, dated September 7, 2011, SW Financial consented to the entry of findings that it had charged a misleading “handling fee” in addition to its commission charges. The purpose of the $69.95 “handling fee,” according to FINRA, was simply to provide additional revenue for the firm, in the same manner as a commission. There allegedly were no direct, handling-related services provided.

SW Financial consented to a fine of $60,000 and a censure.

SW Financial Brokers

If you have questions about losses in your account after working with an SW Financial broker, contact a securities attorney for a free case evaluation. 

 

What Should I Do if I Lost Money?

Our Securities Attorneys Can Help.

Call (877) 600-0098 or email info@kurtalawfirm.com for a free case evaluation.