SEC v. Laidlaw and Company (UK) Ltd. (churning, 2023)

Settled

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In November 2023 the SEC settled with broker-dealer Laidlaw & Company (UK) Ltd., finding it failed to supervise two representatives who recommended an in-and-out trading strategy in nine customer accounts from 2016 to 2018, with cost-to-equity ratios of 203 to 620 percent, and that two others violated Regulation Best Interest's care obligation with excessive recommendations to six customers in 2020 and 2021. The firm was censured and ordered to pay $547,712 in disgorgement, $51,844 in interest and a $223,328 penalty.

The record

What was ordered

Civil penalty

$223k

Disgorgement

$548k

Prejudgment interest

$51.8k

Total relief

$823k

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The Securities and Exchange Commission issued this settled order on November 20, 2023 in administrative proceeding 3-21800. The respondent is Laidlaw & Company (UK) Ltd. (0 individuals, 1 entity), which neither admitted nor denied the findings.

The order finds two failures. From December 2016 to December 2018 Laidlaw failed reasonably to supervise two registered representatives who violated Section 17(a), Section 10(b) and Rule 10b-5 by recommending an in-and-out trading strategy, with no reasonable basis for thinking it suitable given its costs, in nine accounts. Annualised turnover ran from 60 to 276 and cost-to-equity ratios from 203 to 620 percent, well past the thresholds courts treat as indicating excessive trading; the nine customers lost $739,545 and paid $610,192 in commissions and fees. The firm flagged the accounts 50 times in monthly reports but had no system to check that supervisors acted. Separately, from July 2020 to October 2021 two other representatives violated Regulation Best Interest's care obligation by recommending series of transactions to six retail customers that were excessive taken together.

Laidlaw was censured and ordered to cease and desist from violating Rules 15l-1(a)(1) and (2) and to pay disgorgement of $547,712, prejudgment interest of $51,844 and civil penalties of $223,328. An earlier version of this record omitted the disgorgement and carried an unsupported gain figure, which has been removed.

For the regulator's own account of the facts, read the primary document linked above.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Churning — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2023-11-20 Administrative proceeding instituted (cease-and-desist)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.