The U.S. Securities and Exchange Commission (SEC) has announced its decision to prosecute registered broker-dealer Laidlaw and Company (UK) Ltd..And two of its registered representatives, Richard Michalski and Michael Murray, settled charges that they frequently recommended in and out of trades, putting the interest of brokers in earning commissions and fees ahead of the interest of clients in earning profits.。

According to the SEC's order, Laidlaw, Michalski and Murray made a series of recommendations to retail customers from July 2020 to October 2021, but they had no reasonable basis to believe that the proposed transaction would not be excessive, and that the recommendations were in the best interests of the customer based on the customer's investment situation.。

Laidlaw, Michalski and Murray did not consider the cost impact of transaction frequency, and the level of transaction-related costs means that the relevant customers need to earn high returns to break even.。

Laidlaw also does not maintain and enforce policies designed to address and prevent violations of the Best Interests Regulations, its procedures do not provide adequate guidance to supervisors, and there is no way to ensure that supervisors take action to correct violations。

In addition, the order against Laidlaw also found that from December 2016 to December 2018, Laidlaw failed to exercise reasonable supervision over two other registered representatives who violated Section 17 (a) of the Securities Act of 1933 and Section 10 (b) of the Securities Exchange Act of 1934 and Section 10b-5 thereunder. They recommended an in-and-out trading strategy in the client's account because they did not reasonably believe that the strategy was suitable for trading.。

The SEC order also found that Laidlaw knowingly violated the Best Interests Ordinance, Section 15l-1 (a) (1) of the Exchange Act, and the duty of concern (Section 15l-1 (a) (2) (ii) (C)) and compliance (Section 15l-1 (a) (2) (iv) of the Ordinance).。Laidlaw does not acknowledge nor deny the findings, agrees to cease and desist from future violations of these provisions, is reprimanded; and agrees to pay 547,712.$36 penalty, 51,844.$22 pre-trial interest and $223,328 civil penalty。

The SEC's order against Michalski and Murray found that they knowingly violated the Best Interests Ordinance, Section 15l-1 (a) (1) of the Exchange Act and the "duty of care" of the Ordinance (15l-1 (a) (2) (ii) (C)).。

Michalski and Murray, who neither admitted nor denied the findings, agreed to cease and desist from future violations of those provisions and were condemned.。

Michalski also agreed to pay a fine of $88,506, 4,260.$55 in pre-trial interest and $44,253 in civil penalties; and agree to suspend association with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent or nationally recognized statistical rating organization for a period of six months。

Murray also agreed to pay 24,414.$17 fine, 1,143.Pre-trial interest of $91 and civil penalty of $20,000。