It is false and misleading for a broker-dealer to tell potential customers that regulatory oversight protects their account or denotes that a specific investment has undergone due diligence, the Securities and Exchange Commission said Friday. Moreover, it is "at least reckless" to include such misrepresentations when communicating with the public, the SEC said in sustaining the Financial Industry Regulatory Authority's sanctions against a Greeley, Colorado-based broker, CapWest Securities, Inc., for violating NASD Rules 2110, 2210 and 3010. CapWest was censured and fined $25,000 for the advertising violations and $25,000 for failing to implement a supervisory system to reasonably ensure compliance with the substantive rules. As Compliance Complete has reported, the hearing panel imposed a $150,000 fine for the advertising violations but FINRA's National Adjudicatory Council reduced this amount on its own initiative. FINRA previously cancelled CapWest's registration over its
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