Place Trade Financial has agreed to a fine of $10,000 and a censure as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
In October 2020, FINRA warned the firm that certain communications on its website regarding the firm’s services did not provide a sound basis for evaluating the facts or were misleading and exaggerated in violation ofFINRA Rules 2210(d)(l)(A) & (8) and 2010.
The statements identified by FINRA included the following:
- The website represented that it offered “lower” or the “lowest” trading and margin costs available without describing how it reached those conclusions or the data it used, so the website lacked a sound basis for evaluating the firm’s claims.
- The website made claims and statements throughout that were based on “significantly aged source data,” which created “a misleading discussion of the firm’s activities, awards and offerings.”
For example, the website referenced past positive rankings from a well-known financial magazine, including that the firm was awarded “4 1/2 stars” and “a Top 3 ranking in [the magazine’s] special report of the Best Online Brokers” without clearly disclosing that the awards were from 2012, 2013 and 2014, which made these references misleading and exaggerated. The website also represented that it offered “deep discount commissions” based on outdated data from 2005-2014.
Despite the October 2020 warning, the firm failed to fully address all of the statements identified by FINRA until November 2023.
In addition, throughout the period from October 2020 to November 2023, the firm’s website also contained the following other exaggerated, misleading or promissory statements that violated FINRA Rule 2210(d)( 1)(B):
- The website stated that the firm offered “some of the lowest full-service commission rates ofany full-service firm when you work with an experienced financial professional” without describing how it reached those conclusions or the data it used, so the website lacked a sound basis for evaluating the firm’s claims.
- The website emphasized the quality of its trade executions based on outdated data from its clearing firm. For example, the firm claimed “[s]mart traders choose Place Trade for its great executions…,” but the data the firm provided about its clearing firm’s executions was from 2007 to 2014, which did not provide a sound basis from which customers could evaluate the state of the service being offered in later years.
- The website claimed that “most of our financial professionals have over ten or even twenty years of experience in the financial services industry” and “our team is experienced and prepared to assist you with the advice that fits all of your investment planning needs” and “we offer experienced full-service financial consultants to help you with a wide range ofproducts and services.”
However, from October 2020 to November 2023, there was only one registered representative at the firm available to provide services to customers, so these statements were exaggerated and misleading.
- The website stated, “regardless of where you are in life, our experienced full service advisors can help tum the dream of a comfortable retirement into a reality.” This promissory statement was misleading because it improperly promised positive investment returns regardless of market conditions, clients’ available resources, or clients’ time horizons.
Therefore, Place Trade Financial, Inc. violated FINRA Rules 2210(d)(l)(A), 2210(d)(l)(B), and 2010.
Place Trade Financial, Inc. is located in Raleigh, North Carolina, and has been a FINRA member since September 2003. The firm serves retail investors. The firm has one registered representative and two branch offices.
