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 Wilson-Davis & Co., Inc., 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.
Wilson-Davis, now operating as Atlas Clearing, is a self-clearing broker-dealer that provides clearing, settlement, custody, market making and brokerage services in equities, options, government and municipal securities to correspondent firms and investors. Incorporated in Utah in 1968 and based in Salt Lake City, the firm was acquired in 2024 by AtlasClear Holdings, a Tampa-based financial infrastructure company listed on NYSE American.
Wilson-Davis & Co., Inc. – By the Numbers:
- CRD #: 3777
- Regulatory Events: 57
- Arbitration Events: 1
- Broker Employees: 34
Wilson-Davis & Co., Inc. – In the News:
FINRA v. Wilson-Davis & Co., Inc. (Case #2019062183901) – Between March and July 2018 and June and August 2020, Wilson-Davis had deficiencies in the reserves in its special reserve bank account for the exclusive benefit of customers (Customer Reserve Account) ranging from $101,468 to $693,703. Additionally, between February 2018 and August 2018, Wilson-Davis had deficiencies in the reserves in its proprietary securities account of a broker or dealer (PAB Account) ranging from $100,000 to $200,000. Therefore, Wilson-Davis violated Section 15(c) of the Securities Exchange Act of 1934 (Exchange Act), Exchange Act Rule 15c3-3(e), and FINRA Rule 2010. Between September 2019 and November 2020, Wilson-Davis failed to maintain customer securities in an outside money market/sweep account that was a good control location. Therefore, Wilson-Davis violated Exchange Act Section 15(c), Exchange Act Rule 15c3-3(c)(1), and FINRA Rule 2010. Between February 2018 and March 2021, Wilson-Davis’s supervisory system, including its written procedures, was not reasonably designed to achieve compliance with the Customer Protection Rule, specifically the obligation to accurately calculate PAB account requirements and detect errors in that calculation under Exchange Act Rule 15c3-3(e). Therefore, the firm violated FINRA Rules 3110 and 2010.
FINRA v. Wilson-Davis & Co., Inc. (Case #2016048837401) – Wilson-Davis is a self-clearing broker-dealer that specializes in microcap liquidation and trading. Despite the known risks associated with the firm’s microcap liquidation business, from February 2015 through October 2015, Wilson-Davis and its “Designated Supervisors” (James Snow (the firm’s President, Chief Compliance Officer (“CCO”), and Anti-Money Laundering Compliance Officer (“AMLCO”)), Byron Barkley (the firm’s head of trading), and Lyle Davis (the firm’s Chief Executive Officer (“CEO”) and Financial Operations Principal (“FINOP”)) failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (“WSPs”), reasonably designed to achieve compliance with applicable securities laws, regulations, and FINRA rules. These same “Designated Supervisors” failed to reasonably supervise registered representative and market maker Craig Stanton Norton’s trading in NuGene International, Inc. (ticker, “NUGN”) stock by ignoring various “red flags” of potentially suspicious or manipulative trading set forth in the firm’s WSPs, which also failed to establish how the firm’s trading activity should be supervised to detect and prevent such trading. In practice, no one at Wilson-Davis, including Snow, Davis, and Barkley, was conducting a reasonable review of microcap liquidation and trading activity to detect and prevent potentially suspicious or manipulative trading, including Norton’s trading activity in NUGN in 2015. As a result, Wilson-Davis, Snow, Davis, and Barkley violated FINRA Rules 3110(a), 3110(b), and 2010. Further, from February 2015 through October 2015, Wilson-Davis and Snow, who was responsible for the firm’s anti-money laundering (“AML”) program, failed to establish and implement AML policies and procedures reasonably designed to detect, investigate and report, if necessary, suspicious activity related to the firm’s microcap liquidation business. As a result, numerous “red flags” of suspicious activity related to NUGN trading and liquidation activity went undetected and unaddressed. By failing to implement a reasonable AML program, Wilson Davis and Snow violated FINRA Rules 3310(a) and 2010. Finally, during the examination that led to this disciplinary proceeding, Wilson-Davis and Davis provided inaccurate or misleading information to FINRA in response to a Rule 8210 request in violation of FINRA Rules 8210 and 2010.
FINRA v. Wilson-Davis & Co., Inc. (Case #2012032731802) – Member firm engaged in short selling in violation of federal securities laws. The firm, its president, and its head of trading failed to supervise short sales. In addition, the firm and its president failed to supervise and failed to establish and implement anti-money laundering policies and procedures. Held, findings affirmed and sanctions modified.
FINRA v. Wilson-Davis & Co., Inc. (Case #2014042949704) – From January 2013 through August 2013, Wilson-Davis failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to review email correspondence for indications of potential violations of federal securities laws or FINRA rules. In particular, Wilson-Davis lacked any pertinent written supervisory procedures, and its methods for reviewing email messages were ineffective and unreasonable given its business, size, structure, and customers. Through this conduct, Wilson-Davis violated NASD Conduct Rule 3010(a), (b), and (d), and FINRA Rule 2010.
FINRA v. Wilson-Davis & Co., Inc. (Case #2014042306201) – In Matters 20140423062, 20150455300 and 20150475926, the staff of the Department of Market Regulation (the “staff”) reviewed the firm’s compliance with FINRA Rule 6460 during the periods April 1, 2014 through June 30, 2014, January 1, 2015 through June 30, 2015, and July 1, 2015 through March 31, 2016 (the “combined review period”). The staff also reviewed the firm’s supervisory system for achieving compliance with FINRA Rule 6460. Based on these reviews, the Department of Enforcement found that the firm violated FINRA Rules 6460, 6437, 3110 and 2010, and NASD Rule 3010.
If you have suffered investment losses at Wilson-Davis & Co., Inc., the FINRA arbitration attorneys at Gana Weinstein LLP can review your accounts and tell you whether you have a claim. Our consultations are free and we welcome all inquiries.