Broker-Dealer SW Financial Lost FINRA Membership

Financial Industry Regulatory Authority (FINRA) announced last Friday that it has revoked the membership of broker-dealer SW Financial, due to the firm's multiple violations.

Specifically, the American regulator found that between 2016 and 2021, SW Financial made misrepresentations to customers in its sales of private placement offerings of pre-initial public offering (pre-IPO) securities, churned customer accounts, and failed to supervise its representatives.

In addition, FINRA suspended SW Financial's co-owner and CEO, Thomas Diamante, for nine months in all capacities followed by a three-month suspension in all principal capacities. Also, the watchdog imposed a fine of $50,000 on Thomas Diamante, and required him to requalify by examination if he seeks to register with FINRA as a general securities principal or investment banking representative in the future.

"The serious misconduct in this case exposed customers to significant risk of harm and necessitated expulsion of SW Financial from FINRA membership," said Christopher J. Kelly, Senior Vice President and Acting Head of FINRA’s Department of Enforcement.

In March, FINRA has fined Webull Financial LLC​ $3 million for its violation of options customers approval, including not exercising reasonable due diligence before it approved customers for options trading; not maintaining a supervisory system reasonably designed to identify and respond to customer complaints; and not reporting certain written customer complaints to FINRA as required.