Securities representative barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
Former products representative barred for allegedly converting company funds for personal use
FINRA Rule 2010
Product representative suspended and fined for allegedly falsely certifying that she had personally completed the continuing education required to hold an insurance license
Another person had completed 15 hours of insurance continuing education on her behalf.
FINRA Rule 2010
Portsmouth Financial Services censured and fined for alleged compliance failures connected with NT-ETP transactions
The firm’s WSPs did not:
- provide any guidance about how to review and evaluate NT-ETP recommendations;
- indicate how to identify and address potentially unsuitable NT-ETP recommendations;
- require supervisors to take any action to assess whether NT-ETP recommendations were consistent with the intended holding periods identified in the relevant prospectuses;
- provide any guidance as to how the intended holding period should be considered in connection with NT-ETP recommendations.
The firm did not establish a supervisory system that facilitated an effective assessment of NT-ETP recommendations or ensure that its representatives actually considered key factors including intended holding periods before recommending these investments.
The firm conducted “virtually no training to educated its representatives about the proper use of NT-ETPs” or confirm that the representatives understood the unique features and risks of these financial instruments.
A securities representative associated with the firm has been suspended for recommending NT-ETPs to retail customers without a reasonable basis for making such recommendations.
A restitutionary payment of $31,667.02 plus interest has been ordered and the firm has agreed to the imposition of an order requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 2010
FINRA Rule 2111
FINRA Rule 3110
Morgan Stanley censured and fined for alleged disclosure failures connected with municipal security and corporate debt transactions
The firm failed to disclose or did not accurately disclose its mark-ups and mark-downs for approximately 19,000 municipal securities.
In connection with approximately 35,000 fixed price, primary market transactions involving municipal securities and approximately 500,000 fixed price primary market transactions involving corporate or agency debt securities the firm failed to disclose:
- the time of execution; and/or
- a security specific URL.
In addition the firm did not have in place a supervisory system reasonably designed to achieve compliance with the relevant disclosure rules.
FINRA Rule 2010
FINRA Rule 2232
FINRA Rule 3110
MSRB Rule G-15
MSRB Rule G-27
Former securities representative barred for allegedly failing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Former products representative suspended and fined for allegedly placing ten unauthorized trades in a customer account
A disgorgement of £2,551.10 has been ordered.
FINRA Rule 2010
Former securities principal suspended and fined for allegedly exercising discretion without prior written authorization
The principal exercised discretion to effect 280 trades in 11 customer accounts. Although the customers had given express or implied authority to exercise discretion, none had done so in writing as required.
The principal also mismarked at least 1,100 solicited over-the-counter trades as unsolicited.
FINRA Rule 2010
FINRA Rule 3260
FINRA Rule 4511
Securities representative suspended and fined for allegedly forging or falsifying customer signatures
FINRA Rule 2010
FINRA Rule 4511
North Capital Private Securities Corporation censured and fined for alleged offering document filing and retail communication failures
The firm failed to make timely filings related to 92 private offerings.
The firm also reviewed and approved two emails discussing potential investment opportunities that were not fair and balanced and failed to describe the features of the investments or prominently disclose the risks associated with these.
In addition the firm reviewed and approved:
- a slide deck that failed to prominently describe private placement securities as speculative, illiquid and carrying a high degree of risk;
- two slide decks that contained a statement “3rd Party FINRA Compliance Approval”, which improperly implied that FINRA had endorsed the investment described.
FINRA Rule 2010
FINRA Rule 2210
American Portfolios censured and fined for alleged AML compliance program failures
The firm failed to develop and implement an AML program reasonably designed to detect and respond to potentially suspicious activity connected with low-priced securities. The firm’s procedures:
- identified red flags of suspicious activity but failed to provide guidance on how to detect or monitor such activity;
- failed to provide guidance on how to conduct or document a review of red flags identified;
- failed to include appropriate risk-based procedures for conducting ongoing customer due diligence including how and when to identify suspicious transactions.
In practice the firm relied on exception reports prepared by its clearing firm to detect potentially suspicious activity. These reports lacked the detail required for effective money laundering checks.
The firm failed to take reasonable steps to monitor and investigate transactions that raised red flags in at least 10 accounts held by four customers. These customers engaged in suspicious trading patterns and one had a disciplinary history presenting increased risk.
In addition the firm failed to establish, maintain and enforce a supervisory system including WSPs reasonably designed to comply with the registration requirements of Section 5 of the Securities Act. The firm relied primarily on a low-priced security questionnaire completed by the registered representatives that did not specify what documentation should be collected and reviewed or how to verify the information supplied by potential investors.
FINRA Rule 2010
FINRA Rule 3310
FINRA Regulatory Notice 09-05
FINRA Regulatory Notice 19-18
NASD Notice to Members 02-21
SA 1933 Section 5
Chief compliance officer charged with allegedly failing to reasonably supervise trading by a registered representative of the firm
The registered representative’s trading was egregious and had resulted in numerous red flags suggesting churning, excessive as well as unsuitable trading.
The CCO never restricted or limited the representative’s trading or took any other “meaningful steps” to prevent their unsuitable trading despite the red flags and numerous client complaints.
This is a complaint and not an AWC.
FINRA Rule 2010
FINRA Rule 3110
SAL Equity Trading censured and fined for alleged inaccurate TRACE reporting
As a result of a transition to a new TRACE reporting system the firm failed to include the NR indicator for approximately 183,00 transactions executed without a mark-up, mark-down, or commission.
The firm lacked a reasonable supervisory system including WSPs that would permit the supervision of the use of the NR indicator in TRACE reports.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 6730
Former products representative barred for allegedly forging customer signatures as well as Reg BI violations
The representative signed 11 account documents, including transfer of asset and withdrawal forms, for three customers.
In addition the representative made recommendations to customers without having a reasonable basis to believe that these were in their best interest. The recommendations led the customers to incur penalties such as surrender charges, the imposition of lengthier surrender periods and tax consequences.
Finally the representative also used his personal email as well as text messages on his cell phone to communicate with customers.
FINRA Rule 2010
FINRA Rule 4511
SEA 1934 Rule 15l-1
SEC Reg BI
Former securities representative barred for allegedly failing to provide information and documents
This is an amended default decision and not an AWC.
FINRA Rule 2010
FINRA Rule 8210
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |