Citigroup Global Markets censured and fined for allegedly failing to collect initial and maintenance margin on OTC equity option contracts
The failure to collect margin resulted in inaccurate computations of net capital as well as a failure to maintain accurate books and records including the filing of inaccurate FOCUS reports.
FINRA Rule 2010
FINRA Rule 4511
SEA 1934 Rule 17a-3
SEA 1934 Rule 17a-5
Former products representative barred for allegedly refusing to provide information and documents
FINRA Rule 2010
FINRA Rule 8210
Securities representative suspended and fined for allegedly falsely certifying that he had personally completed the continuing education required to hold an insurance license
Another person had completed 15 hours of insurance continuing education on his behalf.
FINRA Rule 2010
Securities representative suspended and fined for allegedly falsifying customer signatures
53 documents were electronically signed on behalf of nine customers with their permission. None of the customers complained.
FINRA Rule 2010
FINRA Rule 4511
Former securities representative barred for allegedly declining to produce information and documents.
FINRA Rule 2010
FINRA Rule 8210
Former securities representative suspended and fined for allegedly making unsuitable recommendations to customers
The investors were seeking low-risk investments to provide monthly income, but were directed to illiquid limited partnerships that involved a “high degree of risk”.
A disgorgement of $153,475.73 has also been ordered.
FINRA Rule 2010
FINRA Rule 2111
Former securities principal suspended for alleged excessive and unsuitable trading in customer accounts
The principal excessively traded in six customer accounts over which he had de facto control.
The trading resulted in high turnover rates and cost-to-equity ratios well above traditional guideposts and was not in the best interest of the customers.
FINRA Rule 2010
FINRA Rule 2111
SEA 1934 Rule 15l-1
SEC Reg BI
Former securities representative suspended for alleged excessive and unsuitable trading in customer accounts
The representative excessively traded in four customer accounts over which he had de facto control.
The trading resulted in high turnover rates and cost-to-equity ratios well above traditional guideposts and was not in the best interest of the customers.
FINRA Rule 2010
FINRA Rule 2111
SEA 1934 Rule 15l-1
SEC Reg BI
Former securities representative suspended for alleged excessive and unsuitable trading in customer accounts
The representative excessively traded in three customer accounts over which he had de facto control.
The trading resulted in high turnover rates and cost-to-equity ratios well above traditional guideposts and was not in the best interest of the customers.
FINRA Rule 2010
FINRA Rule 2111
SEA 1934 Rule 15l-1
SEC Reg BI
Former securities representative suspended for allegedly falsifying information on customer accounts
The representative added his name as beneficiary to eight accounts without authorization from the account holders. The accounts were updated during the transfer of accounts from another firm.
The representative also executed mutual fund sales and UIT purchases without authorization from customers.
The representative has also consented to a requirement for the completion of 20 hours of continuing education regarding discretionary trading within 60 days of re-associating with a FINRA member firm.
FINRA Rule 2010
Citadel Securities censured and fined for alleged CAT reporting failures
The firm inaccurately reported certain fields for approximately 42.2 billion equity and option order events to the consolidated audit trail.
Some 41.8 billion of the inaccurately reported events were connected to three errors:
- Not reporting “0” in the “leaves quantity” field for certain fully cancelled orders (31.2 billion);
- Applying the “representative eligible” instead of the “representative” indicator (6.3 billion); and
- Not populating the Immediate or Cancel (IOC) Time-in-Force code (4.3 billion).
The issues were present in the firm’s reporting since 2020, with the firm remediating all issues by 2024.
FINRA Rule 2010
FINRA Rule 6830
FINRA Rule 6893
FINRA Regulatory Notice 20-31
Former securities representative barred for allegedly refusing to produce information and documents
FINRA Rule 2010
FINRA Rule 8210
IMC Financial Markets censured and fined for alleged CAT reporting failures
The firm inaccurately reported 21.8 billion equity and option order events to the consolidated audit trail. The inaccurate reporting was caused by software and coding system issues including orders:
- with an inaccurate time in force code of “GTX” indicating “Good till Crossing” instead of “IOC” for “Immediate or Cancel” (7.5 billion);
- without the required millisecond count (680 million); and
- including linkage errors.
In addition the firm also failed to reasonably supervise its compliance with CAT reporting obligations. In particular the scope and frequency of its supervisory reviews of its CAT reporting was unreasonable given the volume of data reported.
The firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
Compare and contrast the outcome here with that in the Citadel Securities case above where the firm independently identified and remediated its CAT reporting issues.
FINRA Rule 2010
FINRA Rule 6830
FINRA Rule 6893
FINRA Regulatory Notice 20-31
Former securities representative barred for allegedly refusing to produce documents and information
FINRA Rule 2010
FINRA Rule 8210
Former securities representative charged with allegedly falsifying firm records
The representative entered or caused to be entered front rate and term rate marks “that were false because they failed to fully reflect” the market rate impact of the Federal Reserve interest rate increases.
This was done in order to make it appear that the representative’s positions were more profitable than they actually were and thereby to conceal unrealized losses on the positions.
This is a complaint and not an AWC.
FINRA Rule 2010
Former securities representative suspended and fined for allegedly making recommendations not in the best interest of the customers
The representative recommended investment in:
- leveraged exchange-traded funds to 13 retail customers; and
- equity securities of two companies engaged in crypto asset mining to 11 customers.
The representative did not have “an understanding of the features and risks associated with the investments” and was “unfamiliar with the strategies or relative costs of the products he recommended.”
He did not conduct any analysis to determine whether the products were in the best interest of the customers to whom the recommendations were made.
And he did not have a reasonable basis to believe that the investments were suitable for any retail customer.
In addition the representative mismarked 32 order tickets as unsolicited when he had solicited the trades and exercised discretion in a customer’s account without written authorization.
FINRA Rule 2010
FINRA Rule 3260
FINRA Rule 4511
FINRA Regulatory Notice 09-31
SEA 1934 Rule 15l-1
SEA 1934 Rule 17a-3
SEC Reg BI
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |