Former Western International Securities, Inc. Founder, Majority Owner, and CEO Dawn Bennett Barred by FINRA
Posted on Thursday, May 25th, 2017 at 10:54 am
Erez Law is currently investigating former Western International Securities, Inc. founder, majority owner, and CEO Dawn Bennett (CRD# 1567051) regarding inflating managed assets and exaggerating investment returns for customers. Bennett was registered with Western International Securities, Inc. Washington, DC from 2009 to 2015 when she was “permitted to resign” regarding “Firm decision following discovery of promissory notes with firm customers by registered representative’s company without disclosure to the firm.”
In September 2015, The U.S. Securities and Exchange Commission (SEC) barred Bennett and sanctioned her to pay $600,000 in civil and administrative penalties and fees and $556,102 in disgorgement. According to the statement, the SEC investigation found that between 2009 and February 2011, Bennett “made material misstatements and omissions regarding assets that were purportedly ‘managed’ for investors and regarding investment returns for the purpose of retaining existing customers and attracting new customers.” Additionally, Bennett and Western International Securities, Inc. “made additional misstatements in an effort to obstruct the investigation and to ‘cover up’ their prior fraud.” It is alleged that Bennett and Western International Securities, Inc. overstated their managed assets by at least $1.5 billion, to inflate their “profile and prestige” to a local radio station, a national financial ranking service, and in other advertisements and communication with prospective clients. The claim also alleges that Bennett touted her “firm’s highly profitable investment returns” that placed Western International Securities, Inc. in the “top 1%” of firms worldwide; however, she did not disclose that the returns were of a model portfolio and not of actual customer returns. The investigation allegedly found that Bennett and Western International Securities, Inc. falsely claimed to have given advice regarding $1.5 billion in corporate assets.
In November 2016, “Bennett was named a respondent in a FINRA complaint alleging that she has failed to provide information and documentation requested by FINRA in an investigation involving potentially serious violations, such as conversion, fraud, and private securities transactions. The complaint alleges that on four separate occasions, Bennett failed to appear and provide testimony requested by FINRA.” This investigation is currently pending.
Bennett failed to respond to FINRA request for information and was suspended for 10 days, from August 2 to August 16, 2016.
Bennett has been the subject of 13 customer complaints between 1995 and 2016, one of which was denied, according to her CRD report:
November 2016. “Unsuitable recommendations.” The customer is seeking $100,000 in damages and the case is currently pending.
August 2016. “Unsuitability.” The customer is seeking $274,000 in damages and the case is currently pending.
July 2016. “Unsuitability.” The customer is seeking $100,000 in damages and the case is currently pending.
May 2016. “Misrepresentation & Unsuitability.” The customer is seeking $100,000 in damages and the case is currently pending.
February 2016. “Unsuitability.” The customer is seeking $99,999 in damages and the case is currently pending.
January 2016. “Unsuitability.” The customer is seeking $499,999 in damages and the case is currently pending.
July 2015. “Claimants alleges a lack of diversifcation (sp) in portfolio during the period Nov 2010 through May 2014.” The customer sought $16,944 in damages and the case was settled for $15,801.15.
March 2015. “Misrepresentation.” The case was settled for $65,500.
February 2014. “breach of the general duties of reasonable care, honesty and disclosure; recommending unsuitable investments in violation of Fla. Stat. Section 517.301; common law fraud; breach of fiduciary duty; negligence.” The client was awarded $850,000 in damages.
March 2013. “Following a relationship over fifteen years, client, a non-practicing attorney, filed a claim alleging that, despite her approval on all transactions in her accounts during the period 2006-2012, certain transactions violated a duty owed to her. The records show the client authorized the transactions in the non-discretionary accounts. We believe the allegations are without merit and deny the claim in its entirety.” The client sought $1,625,760 in damages and was granted $100,000.
February 2013. “Despite their financial sophistication and wealth of experience, clients, who authorized all trades before they were entered, allege breach of various duties arising from “Unsuitable” transactions from 2010-2012, a period that was five years after they began their relationship. Because the allegations are without merit and are brought in bad faith, we intend to seek a dismissal of the arbitration and the awarding of all legal and arbitration related fees.” The client sought $1,935,230 in damages and was granted $200,000 in damages.
June 1995. “Client alleges the margin trading account’s record of realized profit & loss was misrepresented; the nature of stocks held for investment purposes in the trading account was misrepresented; that the margin account was excessively trading; and that the maintenance of the margin account was unsuitable given the magnitude of losses and suffered therein. client seeking damages in the amount of $1,151,715.” The case was settled for $450,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Western International Securities, Inc. may be liable for investment or other losses suffered by Bennett’s customers.
Erez Law represents investors in the United States for claims against former Western International Securities, Inc. financial advisor Dawn Bennett, who is alleged to inflate managed assets and exaggerate investment returns for customers. If you were a client of former Western International Securities, Inc. financial advisor Dawn Bennett or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.