Ladenburg Thalman

Our firm has arbitrated many cases for clients with accounts at firms under the Ladenburg Thalman umbrella. Ladenburg Thalman has been around for many years. They are currently owned by Advisor Group.

Ernst Thalmann, and Adolph Ladenburg started the firm back in 1876 when they acquired a seat on the New York Stock Exchange. The firm grew fairly rapidly and was known for its operations as an intermediary between the U.S. and financial institutions in Europe. In the early to mid 20th century, the firm was widely regarded as a big player on Wall Street. Over time it was surpassed by other firms which are household names. Currently, the firm operates as a parent company to five different independent broker-dealers: Securities America, Triad Advisors, Investacorp, Securities Service Network, and KMS Financial Services. Independent broker-dealers tend to act as one man units that operate out of business complexes and sometimes, strip malls. They tend to not have any on-site supervision which can be problematic for the consumer. The firms have many regulatory issues involving investigations by the SEC, FINRA, and various state agencies.

Securities America Inc.

Ameriprise Financial sold Securities America to Ladenburg Thalmann in 2011. Securities America started in Nebraska in 1993. It was once ranked as the 7th largest independent broker-dealer in the U.S. According to official records, Securities America has a regulatory history. In one instance, it agreed to various findings of fact by FINRA regarding variable annuities. Basically, the regulator concluded that that the firm neglected to propound and enforce written protocols of supervision reasonably developed to ensure that variable annuity recommendations made by Securities America agents complied with rules, regulations, and securities laws. FINRA found that the firm sold variable annuities with different share contracts such as "B" and " L" shares. However, firm protocols did not contemplate the suitability of fees and/or costs, and different surrender periods of the various types of variable annuities. FINRA further stated that Securities America's policies (which had to be in writing) omitted the discussion that heightened scrutiny should be applied during the initial review and approval process due to pronounced issues of suitability regarding variable annuities and the different types of shares. FINRA calculated Securities America garnered about $53 million from variable annuity sales. This included over $6 million from L-share sales. Securities America did not specifically admit the conclusions, nor could it specifically deny them. It agreed to a fine and also was censured by FINRA for its actions.

Investacorp, Inc.

Ladenburg Thalmann purchased Investacorp in 2007. However, the firm was started in 1978 and is based out of Miami, Florida. Like the others under the Ladenburg Thalman umbrella, Investacorp categorizes itself as an independent broker-dealer with about 440 independent offices across the country. Its official record demonstrates several regulatory events. According to these records, Investcorp was investigated by FINRA and consented to sanctions that it neglected to identify and grant discounts on volume purchases of certain products. The products include Business Development Companies and private Real Estate Investment Trusts that do not trade on an exchange. The end result was that clients were charged excessive fees. FINRA's conclusions further uncovered that Investacorp failed to establish, maintain, and implement the appropriate written protocols of supervision on the issues of BDC and privately traded REIT sales. Investacorp also did not have procedures reasonably calculated to identify clients that may be eligible for fee discounts based on volume purchases. Investacorp agreed to and was directed to pay restitution and interest to its clients. FINRA also censured and, fined the firm. Furthermore, Investacorp was directed to conduct a review of all trades dealing with the products in question during the relevant period.

Triad Advisors, LLC

Triad Advisors is located in Norcross, Georgia. It started in 1993 and was purchased by Ladenburg Thalmann in 2008. Similar to the others, Triad is an independent broker-dealer and many offices do not have an on-site supervisor. According to the information posted on its website, Triad has about 640 agents nationally.

Also similar to the other firms, Triad has regulatory issues. One such matter to which it consented involved the utilization of consolidated reports and a system utilized by its agents and also for branch office examinations. FINRA concluded, that Triad's WSPs were inadequate to confront customized and or manual reports and further had no detailed protocols to address the issues outlined above. In one instance the designed protocols put in place neglected to uncover reports submitted by former agents that were falsified. In another instance at a particular location, its audit system was insufficient and unable to detect the sale of fake promissory notes to clients. Other issues were uncovered in the FINRA investigation. As a result, FINRA sanctioned Triad which agreed to penalties that included a fine and a censure. Triad was also required to payback negatively impacted clients, and audit and reconstruct its protocols of supervision.

Securities Service Network, LLC

Securities Service Network, also known as SSN, is an independent brokerage firm much like the others. Steven L. Coffey established the Southern Financial Company in 1983 in Knoxville, TN. That entity later became SSN. It also functions as an RIA and conducts insurance operations. It is reported that SSN has about 450 advisors, reps, and insurance agents across the country. SSN has regulatory disclosures

KMS Financial Services, Inc.

KMS originally started in 1971 in Tacoma, Washington. It has been headquartered in Seattle since 1976. Serving mostly the northwestern United States, KMS employs 350 agents and operates as an independent B/D and IA firm. It was purchased by Ladenburg Thalman in 2014. Like the others, there are regulatory issues reported on its official record.

The Law Firm of Shepherd Smith Edwards & Kantas

Were you taken advantage of by and lose money through any of the firms associated with Ladenburg Thalman? If so, contact the securities attorneys at Shepherd Smith Edwards & Kantas. Our firm has filed cases against Ladenburg entities, or their affiliates, for negligent and/or fraudulent conduct. As discussed, many brokers employed by Ladenburg are self-supervised with only off-premise management to fulfill supervisory responsibilities. In these situations, it is not uncommon for clients to be taken advantage of by improper conduct. Please contact us for a free consultation.

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