Texas securities regulator fines N.J. firm $50,000 for broker’s misconduct

The Texas State Securities Board ordered a New Jersey firm to pay $50,000 for allegedly failing to supervise a broker who overloaded clients’ accounts with energy stocks.
The Investment Center Inc., a securities dealer registered in Texas, was reprimanded and hit with the administrative fine Tuesday.
The consent order follows a complaint from a Texas investor regarding the firm and one of its former brokers, according to the statement released by the TSSB. The broker was not identified.
Between 2010 and 2014, certain clients at the firm held 95% of their total investible assets in equities in the energy sector, at the agent’s recommendation, the order alleges. In some instances, all of those shares were in one company, despite the clients’ low tolerance for risk, according to the document.
Even though the agent’s actions raised internal alert reports due to the concentrated equity positions in client accounts and decline in value of certain accounts, the firm failed to properly address them, said the board.
During the TSSB’s investigation, the firm paid the investor who filed the complaint $98,000 and the current fine will go to the general fund of the state, according to the statement.