Fwg Investments, Llc

Summary: THE KENTUCKY DEPARTMENT OF FINANCIAL INSTITUTIONS ("DFI") AFTER A ROUTINE COMPLIANCE EXAMINATION OF FWG INVESTMENTS OPENED A FORMAL INVESTIGATION INTO FWG INVESTMENTS' INVESTMENT-RELATED ACTIVITIES ON JUNE 26, 2018. DFI AND FWG INVESTMENTS ENTERED INTO A PARTIAL AGREED ORDER ON APRIL 30, 2020 (THE "FWG ORDER") TO RESOLVE THE MATTER WITHOUT LITIGATION OR OTHER ADVERSARY PROCEEDINGS AND WITHOUT FWG INVESTMENTS ADMITTING LIABILITY. DFI CLAIMS THAT THE FOLLOWING VIOLATIONS EXISTED AND ARE REFERENCED IN THE FWG ORDER: (1) FWG INVESTMENTS EMPLOYED OR ASSOCIATED WITH TWO INDIVIDUALS, DONALD EUGENE BENTLEY ("BENTLEY") AND JEFFREY KYLE SHEPPARD ("SHEPPARD") WHO PROVIDED INVESTMENT ADVICE TO CLIENTS WHILE THEY WERE NOT REGISTERED AS INVESTMENT ADVISERS WITH THE DFI. SHEPPARD BECAME REGISTERED AS AN INVESTMENT ADVISER REPRESENTATIVE ("IAR") ON JULY 6, 2018. BENTLEY FAILED TO SATISFY THE REQUIREMENT THAT HE PASS THE SERIES 65 EXAM AND HAS SINCE PASSED THE EXAM. HOWEVER, BENTLEY'S REGISTRATION WAS SUSPENDED UNDER A SEPARATE AGREED ORDER BETWEEN HIM AND THE DFI FOR 120 DAYS FROM APRIL 30, 2020. WHEN BENTLEY'S REGISTRATION WAS TERMINATED FOR FAILURE TO PASS THE SERIES 65 EXAM, THE FWG ORDER NOTES THAT FWG INVESTMENTS MISREPRESENTED BENTLEY'S QUALIFICATIONS AS AN IAR BY FAILING TO DISCLOSE HE WAS NOT PROPERLY REGISTERED AND ALLOWING HIM TO MEET WITH CLIENTS AND PROVIDED INVESTMENT ADVICE. (2) FWG INVESTMENTS FAILED TO MAINTAIN CLEAR AND ACCURATE COPIES OF CORRESPONDENCE BETWEEN FWG INVESTMENTS' CLIENTS AND EMPLOYEES AS REQUIRED UNDER KENTUCKY LAW. (3) FWG INVESTMENTS FAILED TO MAINTAIN CLEAR AND ACCURATE TRANSACTION RECORDS AS REQUIRED UNDER KENTUCKY LAW. WITHOUT ADMITTING LIABILITY, FWG INVESTMENTS AGREED TO PAY A CIVIL FINE OF $50,000 AND TO CEASE AND DESIST FROM ANY FURTHER VIOLATIONS.