Securities Lawyers Blog
The securities lawyers at Gana Weinstein LLP represent investors who have been mistreated by their brokers and suffered investment losses. Our firm is experienced in bringing claims against brokerage firms, such as H.C.Wainwright & Co., LLC, to hold Wall Street responsible for their misconduct. When a client contacts our firm they can expect that our attorneys will have the knowledge and ability to evaluate the potential claims and analyze their trading activity for red flags of misconduct. Our consultations are designed to help provide clients with all available options.
H.C. Wainwright is an investment bank that provides capital raising, underwriting, private placements, mergers and acquisitions advisory, equity research, sales and trading and market making, with a strong focus on small and mid cap growth companies in sectors such as healthcare. Headquartered on Park Avenue in New York City, the firm traces its name to a Boston investment house from the nineteenth century and is employee owned through an employee stock ownership trust.
H.C.Wainwright & Co., LLC – By the Numbers:
- CRD #: 375
- Regulatory Events: 16
- Broker Employees: 73
H.C.Wainwright & Co., LLC – In the News:
FINRA v. H.C.Wainwright & Co., LLC (Case #2022075458801) – From December 2020 through March 2022, H.C. Wainwright served as a guarantor on loans ranging from $50 million to $175 million taken by its parent company in connection with an employee stock ownership transaction. The firm failed to take an appropriate net capital charge for these loans, resulting in a net capital deficiency for 14 out of 16 months with the largest deficiency being $164,922,628 and an average deficiency of $95,931,666. During the relevant period, the firm also made capital withdrawals of $250,039,448. By conducting a securities business and making capital withdrawals while in net capital deficiency, the firm violated Section 15(c) of the Exchange Act of 1934, Exchange Act Rule 15c3-1, and FINRA Rule 2010. As a result of the firm’s failure to include the amounts of the loans in its net capital calculations, H.C. Wainwright also filed 16 inaccurate Finance and Operational Combined Uniform Single (FOCUS) Reports in violation of Section 15(c) of the Exchange Act, Exchange Act Rule 17a-5, and FINRA Rule 2010. Accordingly, it also failed to create and preserve accurate books and records in violation of Section 17(a) of the Exchange Act and Exchange Act Rule 17a-3, as well as FINRA Rules 4511 and 2010. Finally, the firm failed to provide written notice to FINRA prior to agreeing to serve as guarantor to the loans in violation of FINRA Rules 4150(a) and 2010.
FINRA v. H.C.Wainwright & Co., LLC (Case #2017055977301) – Between September 2017 and September 2020, H.C. Wainwright failed to preserve and reasonably supervise its employees’ business-related text messages. During that period, at least 24 firm employees communicated about firm business in text messages outside of the firm’s approved communications platforms on their personal cellphones. The firm did not obtain, and thus did not preserve, these communications at the times they were exchanged; the firm first obtained certain of these communications in the course of, and as a consequence of, the investigations that led to this AWC. The failure to preserve these communications prevented FINRA from fully investigating matters in two FINRA investigations. As a result of the firm’s failure to preserve business-related communications, the firm violated § 17(a) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-4, and FINRA Rules 4511 and 2010. Senior members of the firm’s management were among the employees who communicated about firm business in text messages on their personal cellphones. Chambers (the firm’s president and head of its investment banking department) and Kristal (the firm’s director of research) routinely exchanged text messages about firm business with each other on their personal cellphones outside of the firm’s approved communications platforms. Chambers and Kristal exchanged these text messages despite the firm’s prohibition on business-related written communication between investment banking and research personnel. The firm did not obtain, and thus did not preserve, any of these text messages at the times they were exchanged. Nearly all of these text messages were deleted before FINRA requested them and thus could not be provided to FINRA staff in connection with an investigation into whether the firm’s investment banking personnel improperly influenced the firm’s research coverage. By communicating about firm business in text messages that the firm did not preserve, Chambers and Kristal violated FINRA Rules 4511 and 2010. While the firm’s written supervisory procedures (WSPs) prohibited employees from using text messaging for business-related communications, and the firm’s compliance department discussed this prohibition with employees several times each year, the firm’s management knew that firm employees were using text messaging for business-related communications, because they themselves were texting each other and others about firm business. But the firm did not take reasonable steps to prevent those communications. The firm therefore failed to enforce its WSPs prohibiting the use of text messaging for business-related communications. In addition, the firm took no steps to preserve or review its employees’ text messages so it could reasonably supervise them. Therefore, the firm violated FINRA Rules 3110(a), (b)(1), and (b)(4) and 2010. Between March 2019 and September 2020, the firm also failed to reasonably supervise its employees’ email communications.
Gana Weinstein LLP represents individuals, families, and institutions in securities arbitration and litigation against brokerage firms. If you suspect churning, excessive commissions, unauthorized trading, or other misconduct in your H.C.Wainwright & Co., LLC account, our consultations are free and confidential.