In May 2008, FINRA fined NEXT Financial Group for reporting violations; NEXT Financial is obligated to update FINRA when certain material adverse events occur at the firm, including customer complaints and the termination of brokers. According to the 2008 FINRA complaint, NEXT Financial failed to keep FINRA apprised of new complaints and adverse events within the time requriements for that reporting.

In November 2010, FINRA fined NEXT Financial $400,000 for its failure to maintain a reasonable system for reviewing excessive trading. The FINRA complaint against NEXT Financial Group also required the firm to pay over $100,000 in restitution to customers, and to implement an effective supervision system.

In November 2011, NEXT Financial was ordered to pay $2 million in restitution for complaints related to the sale of high risk private placements Provident Royalties. Those investments failed. FINRA also found that NEXT Financial misstated material facts concerning the offering of this product to its customers. More than only a fine and restitution, NEXT Financial’s owner and chief compliance officer were suspended by FINRA, which is an unusually strong penalty. Hopefully, this strong penalty will help NEXT Financial avoid the same or similar conduct in the future.

In May 2014, FINRA fined NEXT Financial more than $85,000 for failing to establish an adequate supervisory system for its brokers. The supervisory system is the backbone of what a firm does to protect and serve customers. But the complaint was not an isolated event but about the system; raising additional questions about NEXT Financial related to its inadequate supervisory system, and what brokers may have done.

In addition to these regulatory complaints, stockbrokers at NEXT Financial Group have been the subject of a number of arbitration proceedings brought by customers. These complaints have alleged, among other things that the firm and its brokers engaged in securities fraud, churning or the recommendation of unsuitable investments.

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