FA Suspended, Ordered to Return $2.75M in Commissions Over Sale of Alts

By Alex Padalka October 26, 2020

Texas’s securities regulator has suspended a San Antonio investment advisor who allegedly sold alternatives to unsophisticated, conservative investors without notifying the firm where she was registered.

Brooklynn Chandler Willy became an investment advisor representative in March 2014, registering with Global Financial Private Capital and, starting in April 2019, was registered with its successor J.W. Cole Advisors, which does business as Texas Financial Advisor, according to the SEC’s Investment Advisor Public Disclosure database and the Texas State Securities Board.

Willy and other TFA agents allegedly recommended to clients to invest in certain unnamed alternative investments, and Willy never disclosed the sales either to GFPC nor to J.W. Cole, and was never registered as a dealer or agent of a dealer with the state’s securities commissioner, the regulator says.

Willy allegedly never performed reasonable due diligence to determine the suitability of the investments for the clients to whom she was recommending them, some of whom were conservative, unsophisticated investors who ended up putting close to half of their liquid assets into private, illiquid alternatives, according to the Texas State Securities Board.

Meanwhile, Willy and other TFA agents earned $2.75 million in commissions from the alternative investments’ issuers, the regulator says.

The Texas State Securities Board says it has ordered Willy to pay back the $2.75 million to the clients to whom she and other TFA agents sold the alternatives.

After leaving J.W. Cole, Willy was registered with TCFG Investment Advisors for less than two weeks, according to her SEC profile. Since October 16, Willy has been registered with Queen B Advisors in New Braunfels, Texas, according to his SEC profile.

The Texas State Securities Board granted the registration of Queen B — which is owned by Willy — but barring it for five years from any discretionary trading in client accounts and from recommending alternative investments, the regulator says.

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