A Denver-based investment advisor has agreed to pay a $200,000 penalty for purchasing restricted securities for clients who were not qualified to be put into the products, the SEC announced today.

First Western Capital Management Company (FWCM) was also censured as part of the consent agreement. As is typical with such settlements, the firm neither denied nor admitted to the SEC's findings.

The SEC complaint stated the firm is headquartered in Denver. The firm's website and SEC registration documents, however, list a Los Angeles business adress.

The SEC found that from October 2010 to July 2017, FWCM reps purchased about $666 million of restricted securities—representing about 9.4% of security purchases for all client accounts—for 81 advisory accounts that were not qualified institutional buyers. The agency noted that, under Rule 144A of the Securities Act of 1933, such sales are restricted to only "qualified institutional buyers" (QIBs).

The SEC's complaint said FWCM, due to inadequate training and supervision of its reps, ended up selling the restricted securities to "individuals and trusts, individual retirement accounts, and small institutional accounts that did not meet the $100 million asset threshold to be considered a QIB."

"FWCM had supervisory policies and procedures for all employees and managers with supervisory responsibilities," the complaint said. "However, during the relevant period, FWCM did not adopt supervisory policies and procedures specifically addressing Rule 144A securities."

During the time of the violations, FWCM provided advisory services to about 651 advisory clients and employed nine investment advisors, according to the SEC complaint. The firm, which has been a registered RIA sincec 2010, as of the end of last year had 395 clients and $962 million in client assets under management, the SEC said.

Representatives of the firm did not respond to a request for comment at press time.