Financial West Investment Group fined over private placement escrow accounts.
In June 2017, the Financial Industry Regulatory Authority (FINRA) announced that Financial West Investment Group of Westlake, California, submitted an acceptance, waiver and consent letter, or AWC, regarding its participation in private placement offerings without the use of an escrow account. The firm was censured and fined $20,000.
FINRA’s allegations against Financial West Investment Group concerned the firm’s role in collecting and placing private placement securities without the use of an escrow account, which is a violation of industry rules. The AWC stated that the firm did not designate an account to receive the funds, and instead sent checks from the investors directly to the issuer. Such actions violate not only the firm’s Written Supervisory Procedures but also the Securities Exchange Act of 1934.