Brokerage Firm Review: Triad Advisors LLC

Triad Advisors LLC (“Triad Advisors”) (CRD# 25803) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors. At the Law Offices of Robert Wayne Pearce, we have investigated Triad Advisors, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Triad Advisors, you should strongly consider hiring an investment fraud attorney. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Triad Advisors LLC?

If you’ve lost money caused by Triad Advisors and/or its employees’ misconduct then the answer is, YES,  you can sue Triad Advisors but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.  Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Triad Advisors in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Triad is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Triad Advisors LLC?

Triad Advisors (CRD# 25803) predecessor was initially registered with the SEC and FINRA in 1990. Since then there have been name changes and restructuring of Triad Advisors.  The company is currently controlled by Advisors Group, Inc. and headquartered in Norcross, Georgia with offices throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 350 Triad Advisors branch offices with over 900 registered representatives in every state.  It is now part of one of the largest broker-dealer and investment advisory firm networks in the United States with over 11,500 financial advisors.

Triad Advisors Has Many Different Regulatory Problems 

Triad Advisors’ rapid growth has not been without consequences. There have been approximately 7 FINRA,  state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against Triad Advisors for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Triad Advisors is a repeat offender: there are 4 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.

A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS TRIAD ADVISORS HAS FACED OVER THE YEARS*

Triad Advisors has been repeatedly censured, warned, ordered to pay disgorgement and restitution, and fined the company over $1 million for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

FINRA Sanctions Triad Advisors For Numerous Supervisory Lapses

FINRA investigated and found Triad Advisors failed to establish and maintain a reasonable supervisory system to achieve compliance a number of its rules.

First, FINRA found Triad Advisors failed to comply with suitability requirements regarding switching and short-term trading of class A share mutual funds and failed to supervise such trading. As a result of the foregoing, FINRA concluded Triad Advisors violated FINRA Rules 2111, 3110 and 2010.

Additionally, FINRA found Triad Advisors failed to establish, maintain, and enforce a reasonable supervisory system and Written Supervisory Procedures (WSPs) that were reasonably designed to identify possible inappropriate rates of variable annuity exchanges. As a result of the foregoing, FINRA concluded Triad Advisors violated FINRA Rules 2330(d), 3110 and 2010.

Finally, FINRA found Triad Advisors failed to timely file 19 Rule 4530 disclosures in connection with customer-related arbitrations and written customer complaints. In addition, in six instances, Triad Advisors failed to timely update its registered representatives’ Uniform Application for Securities Industry Registration or Transfer Form (Form U4) to disclose reportable events. In ten instances, Triad Advisors failed to timely update Uniform Termination Notice for Securities Industry Registration Form (Form U5) to disclose reportable events. As a result of the foregoing, FINRA concluded Triad Advisors violated FINRA By-Laws, Article V, Sections 2 and 3 and FINRA Rules 4530(a)(1)(G), 4530(d), and 2010.

FINRA sanctioned Triad Advisors for the rule violations by issuing a censure, $175,000 fine, and ordering restitution of $43,998.48 plus interest.

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FINRA Sanctions Triad Advisors For UIT Sales Abuses

FINRA investigated and found Triad Advisors failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (“UITs”) in violation of FINRA Rule 2010. In addition, Triad Advisors failed to establish, maintain and enforce a supervisory system and adequate written supervisory procedures reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases in violation of NASD Rule 3010 and FINRA Rule 2010.

FINRA concluded, as a result of the foregoing, to impose the following sanctions: Censure; Fine of $175,000; and Restitution to the affected customers in the total amount of$102,631.62, plus interest at the rate set forth in Section 6621(a)(2) of the Internal Revenue Code, 26 U.S.C. 6621(a)(2).

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FINRA Sanctions Triad Advisors For False And Misleading Reports

FINRA investigated Triad Advisors and found the broker dealer failed to establish, maintain, and enforce a reasonable supervisory system regarding the use of consolidated reports by its registered representatives. In conducting one of its audits FINRA discovered Triad Advisors allowed its representatives to create and provide consolidated reports to its customers and specifically made a system available to its registered representatives that permitted consolidated reporting and allowed the representatives to enter values for assets and accounts held away from Triad Advisors. However, Triad Advisors did not have an adequate system to supervise the accuracy of valuations provided to the customers, in violation of NASD Conduct Rules 3010(a) and (b) and FINRA Rule 2010. Moreover, Triad’s failure to adequately supervise the consolidated reports and the manual entries of assets resulted in inaccurate statements being sent to certain customers, in violation of NASD Conduct Rules 2210(d)(1) and 2110 and FINRA Rule 2010.

Additionally, FINRA discovered Triad Advisors failed to establish, maintain and enforce a reasonably designed supervisory system and written procedures regarding its examinations of branch offices, in violation of NASD Conduct Rule 3010(c) and FINRA Rule 2010. Triad Advisors further failed to reasonably supervise two former representatives who provided consolidated reports to customers that contained inaccurate and false assets, in violation of NASD Conduct Rule 3010(a) and FINRA Rule 2010. Also, Triad Advisors violated NASD Conduct Rule 3012 and FINRA Rule 2010 in that its supervisory controls report for the year 2010 was deficient, in that it failed to adequately focus on known areas of concern regarding Triad Advisors’ procedures and to detail needed changes or changes that were made to their supervisory policies and procedures.

Furthermore, Triad Advisors conducted a securities business while failing to maintain its required minimum net capital on 10 business days in 2009. Triad further created and maintained inaccurate books and records in that it failed to maintain accurate net capital computations during the period from January 2008 through June 2010. Triad Advisors filed inaccurate FOCUS reports for the period from January 2008 through June 2010. Moreover, Triad Advisors did not promptly file Securities Exchange Act of 1934 (“SEA”) Rule 17a-11 notifications regarding the net capital deficiencies in November and December 2009, as required, all in violation of SEA Sections 15(c)(3) and 17(a), SEA Rules 15c3-1,17a-3, 17a-5(a) and 17a-11, NASD Conduct Rules 3110 and 2110 and FINRA Rule 2010.

Finally, Triad Advisors failed to comply with the requirements of Regulation S-P (17 C.F.R. §248.5) and violated FINRA Rule 2010 in that it failed to send its 2009 privacy policy notice to a group of its customers and failed to enforce its procedures regarding the encryption of electronic messages containing personal confidential information.

FINRA concluded, as a result of the foregoing, to impose the following sanctions: censure; $650,000 fine; and restitution to the customers listed on in the aggregate amount of no less than $375,000.

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FINRA Sanctions Triad Advisors For Reporting Deficiencies

As part of its Audit Program, FINRA discovered Triad Advisors failed to report 62 of 100 corporate bond trades within the time period prescribed by NASD Conduct Rule 6230, in violation of NASD Conduct Rules 2110 and 6230. In addition, during this same time period, the firm failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Rule 6230, in violation of NASD Conduct Rules 2110 and 3010. FINRA concluded, as a result of the foregoing, to impose the following sanctions: censure; and $10,000 fine.

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Why Does Triad Advisors LLC Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Triad Advisors LLC Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Triad Advisors is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Triad without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Triad Advisors Today!

The securities attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Triad Advisors cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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