Tourmaline Partners censured and fined for allegedly recording inaccurate order receipt and transmission times on order memoranda
The firm also failed to establish a reasonably designed system to supervise the accuracy of order times on its order memoranda. No supervisory review of its accuracy was required.
The firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 2010 FINRA Rule 3110 FINRA Rule 4511 SEA 1934 Rule 17a-3(a)(6)(i)
Former securities representative suspended and fined for allegedly structuring cash deposits to avoid federal reporting requirements
Some 31 cash deposits, each in amounts below $10,000 and totalling $248,460, were made across 10 branch locations belonging to two difference financial institutions.
FINRA Rule 2010
Former securities representative barred for refusing to provide documents and information
FINRA Rule 2010 FINRA Rule 8210
Stifel, Nicolaus & Company and Stifel Independent Advisors censured and fined for alleged unsuitable advice connected to NT-ETPs
NT-ETPs are complex financial instruments designed to be held for only short periods of time. Between June 2014 and March 2018 the firms failed to provide reasonable guidance on how to identify and address unsuitable recommendations connected with these financial instruments.
The firms did not require supervisors to take any action to assess whether the NT-ETP recommendations made by representatives were consistent with the intended holding periods of the instruments.
In January 2015, the firms implemented an alert flagging NT-ETP position held for longer than 30 days, but immediately deactivated the alerts after it resulted in over 2,000 hits per day. The alert was reactivated in March 2015, but as no training was provided to supervisors, red flagged cases were cleared without the underlying unsuitability being addressed.
Representatives continued to recommend purchasing and holding the products for unsuitable periods until their sale was prohibited by the firms in November 2017 and March 2018.
Restitutionary payments of $1,189,841.54 from Stifel, Nicolaus, and $100,095.63 from Stifel Independent Advisors have also been ordered.
FINRA Rule 2010 FINRA Rule 3110 NASD Rule 3010 FINRA Regulatory Notice 09-31
Palladium Capital Group censured and fined for alleged AML program failings
The AML program did not include risk-based procedures for customer due diligence and no ongoing customer due diligence of investors was undertaken. The firm’s independent testing did not include material aspects of its AML program such as suspicious activity monitoring or reporting and was inadequate as a result.
The firm’s AML procedures were not reasonably designed and omitted key red flags including, for example, those related to issuers of low-priced securities. The firm also failed to take reasonable steps to investigate the red flags that were identified.
In addition the firm’s due diligence on issuers was unreasonably narrow and omitted key data points and material information.
The firm has also agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues that have been identified.
FINRA Rule 2010 FINRA Rule 3310 NASD Notice to Members 02-21 FINRA Regulatory Notice 19-18 FINRA Regulatory Notice 10-22
Former securities representative barred for refusing to provide documents and information
FINRA Rule 2010 FINRA Rule 8210
Offer of settlement in connection with alleged spoofing by former securities representative accepted
The original complaint was filed in by FINRA in May 2023 and involved 523 non-bona fide orders in US Treasury Bonds placed to create a false appearance of market activity in order to secure favourable execution at better prices.
This is an order accepting the offer of settlement and not an AWC.
SEA 1934 Rule 10b-5 SA 1933 Rule 17a FINRA Rule 2010 FINRA Rule 2020 FINRA Rule 5210
Former securities representative suspended and fined for allegedly cheating on an MSRB exam administered by FINRA
FINRA Rule 2010 MSRB Rule G-3
Former securities principal and compliance officer suspended and fined for allegedly charging unfair commissions
The principal failed to consider all relevant factors in determining the commissions charged for executing the individual transactions. A “percentage of each transaction’s principal value approaching 5% that would produce a round number dollar amount” was charged instead.
A restitutionary payment of $42,768.72 has also been ordered.
FINRA Rule 2010 FINRA Rule 2121
Former securities representative suspended and fined for allegedly exercising discretion in the accounts of two customers without written authorization
FINRA Rule 2010 NASD Rule 2510
Coughlin & Company censured and fined for allegedly failing to use an escrow agent when participating in contingency offerings
Between January 2018 and July 2022 the firm participated in contingency offerings, but did not establish an escrow or separate account for investor funds and transmitted investor funds directly to the issuer before the contingency was met.
The firm had no procedures or systems to establish escrow accounts or to detect whether the required offering minimum had been met or determine when to release funds to issuers. The firm also failed to designate a principal with responsibility for supervising contingency offerings.
The firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Regulatory Notice 16-08 FINRA Rule 2010 FINRA Rule 3110
H2C Securities censured and fined for alleged electronic communications recordkeeping failures
From January 2013 to June 2021 the firm failed to preserve over 1.25m business-related electronic communications because it had not established data feed from four platforms to the system that the firm used to store and maintain electronic communications.
The firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
SEA 1934 Rule 17a-4 FINRA Rule 2010 FINRA Rule 3110 FINRA Rule 4511 NASD Rule 3010
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
