Securities representative suspended and fined for allegedly making recommendations that resulted in a customer incurring unnecessary sales charges
The customer could have received fee discounts had the recommendations considered accumulation rights accruing to the customer from the investment in fewer fund families. A restitution of $20,867 plus interest has also been ordered to make the customer whole.
FINRA Rule 2010 FINRA Rule 2111
Products and contracts principal suspended for allegedly participating in private securities transactions without providing notice of these to his employer
FINRA Rule 2010 FINRA Rule 3280
Barclays Capital censured and fined for alleged LOPR reporting violations
The firm failed to report or inaccurately reported OTC options position to the LOPR in approximately 4.3 million instances between January 2011 and December 2022. The reporting problems all stemmed from issues with the underpinning reporting technology, specifically:
- aggregation logic problems;
- suppression logic problems;
- coding errors;
- systems logic problems connected to a transition to a new trading software platform.
FINRA’s investigation also found that the firm’s supervisory system was not reasonably designed in order to achieve compliance with the LOPR reporting requirements. The firm’s systems and procedures did not include adequate reviews to ensure compliance and did not detect or correct the problems for over 10 years.
FINRA Rule 2010 FINRA Rule 2360 FINRA Rule 3110 NASD Rule 3010
Former products representative barred for allegedly refusing to produce documents and information
FINRA Rule 2010 FINRA Rule 8210
Products representative barred for allegedly converting customer funds
The representative paid some of the customer’s personal expenses, but the reimbursement received from the customer far exceeded the expenses actually incurred.
FINRA Rule 2010 FINRA Rule 2150
Securities representative suspended and fined for allegedly improperly removing personal customer information from his employer
FINRA Rule 2010
Regal Securities censured and fined for alleged supervisory system failures connected to manipulative trading
A customer was permitted to open a trading account despite reservations about this by the firm’s compliance department and trading desk. They were permitted to trade between August 2017 and January 2019, during which their trading triggered “approximately 1,600 firm surveillance alerts indicating potential marking the close activity” and 40 alerts suggesting “potential wash trading.”
The firm did not reasonably review the alerts or take action in connection with them. In addition the firm did not have surveillance systems in place that could “detect layering or similar activity”.
FINRA Rule 2010 FINRA Rule 3110
Former products representative suspended and fined for allegedly not disclosing tax liens in a timely fashion
FINRA By-Laws Article V, Section 2(c) FINRA Rule 1122 FINRA Rule 2010
Carney Group sanctioned for allegedly failing to conduct independent testing of its AML compliance program
Under FINRA Rule 3310(c) independent testing for compliance is required every two years in instances where a firm does not act as an introducing broker, hold customer accounts or execute transactions for customers. The firm is now required to remediate the issues and also complete the independent testing required.
FINRA Rule 2010 FINRA Rule 3310
Former securities representative suspended and fined for allegedly making unsuitable investment recommendations
The recommendations did not comply with the firm’s concentration limits for alternative investments. Some investor profiles were knowingly altered in order to obtain the necessary approval for the purchases. The resulting recommendations and purchases meant that customers’ investments were “unsuitable for them based on their net worth, investment objectives and risk tolerance.” Because customers were affected a partial restitution of $9,788 has also been ordered.
FINRA Rule 2010 FINRA Rule 2111
RBC Capital Markets censured and fined for alleged supervisory failures connected to the suitability of preferred stock
From January 2017 to December 2018 nearly 40 RBC representatives recommended the purchase of preferred stock securities, which are generally held long-term. They then recommended the sale of the same security, often at a loss, after collecting the sales concession.
RBC’s supervisory system “did not have any alerts that specifically monitored for short-term trading in preferred stock” and its Flip Trade Alert did not flag these trades because they did not trigger its specific parameters. During the period in question there were 798 recommended preferred stock purchases with a holding period of 180 days and registering a loss on the sale. A restitution of $128,643 and disgorgement of $653,312 plus interest has been ordered covering commission collected from customers and concessions collected from the issuers respectively.
FINRA Rule 3110 FINRA Rule 2010 FINRA Rule 2111
Former firm employee barred for allegedly cheating during an exam
FINRA Rule 1210.05
FINRA Rule 2010
FINRA Rule 1210.05 FINRA Rule 2010
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |