Former securities representative barred for allegedly refusing to produce information and documents
FINRA Rule 2010 FINRA Rule 8210
Former securities representative suspended and fined for allegedly failing to disclose felonies on Form U4
FINRA By-Laws Article V, Section 2 FINRA Rule 1122 FINRA Rule 2010
Securities representative suspended and fined for allegedly attempting to impersonate a customer
In order to help a customer the representative misrepresented that he was the customer in question on a single telephone call with an annuity provider and then denied this when challenged by his employer.
FINRA Rule 2010
Former securities principal suspended and fined for alleged contravention of affiliate selling arrangements
The CEO and co-founder of Crews circumvented the firm’s arrangements with a banking affiliate interposing third-party broker-dealers to sell bonds, including a markup, from the firm’s general inventory rather than for a specific account dedicated to transactions with the affiliate. As a result of this arrangement the affiliate paid £918,476 in unnecessary markup fees.
MSRB Rule G-17 MSRB Rule G-18
Crews & Associates censured and fined for alleged affiliate selling arrangement violations
An agreement requiring bonds with no markup to be sold to the bank affiliate was in place in order to ensure regulatory compliance by the affiliate. Bonds including a markup and intended for use when selling to customers were indirectly sold to the affiliate bank by third-party broker-dealers acting as intermediaries.
MSRB Rule G-17 MSRB Rule G-18 MSRB Rule G-27
Former securities representative suspended and fined for allegedly borrowing money without notice or approval
FINRA Rule 2010 FINRA Rule 3240
MML censured and fined for allegedly failing to amend its U4 and U5 forms in a timely fashion and for supervisory system failures connected with these forms
39 reportable events, including customer complaints, were not reported in a timely fashion with delays of up to 1,100 days after the firm receiving notice of these. The firm failed to establish a supervisory system that would permit timely updating of the disclosable events forms. Too much reliance was placed on employees providing timely updates to the regulatory reporting team. Delegation of responsibility was not clear, there were no supervisory procedures that would ensure that updates were provided regularly, and there was no set cadence on regulatory reporting team searches and follow-ups.
FINRA By-Laws Article V, Section 2 FINRA By-Laws Article V, Section 3 FINRA Rule 1122 FINRA Rule 2010 FINRA Rule 3110
Former securities principal suspended and fined for allegedly deceiving investors and for supervisory and due diligence failures
The CEO and majority owner of SW Financial failed to inform the firm’s CCO and others at the firm that additional compensation would be due to the firm in connection with private placements of pre-IPO offerings. He also failed to conduct reasonable due diligence on the private placement offerings, failing, for example, to determine the markup applied to the offerings.
FINRA Rule 2010 FINRA Rule 3110
SW Financial expelled for alleged misconduct and supervisory failures
The firm has a history of FINRA rule violations having consented to previous FINRA findings and having entered into AWCs on three other occasions between 2011 and 2018. The expulsion order is likely connected with both the seriousness of the allegations in this case as well as a history of rule violations.
Between January 2018 and December 2021 the firm made material misrepresentations and omissions to investors in connection with private placement offerings. Specifically the firm told investors that it would only receive a sales commission, despite having entered into an agreement with the issuers to receive additional compensation.
When making the recommendations to its customers the firm lacked a reasonable basis for determining that the investments were suitable or in the best interest of some of its customers. In addition the firm churned nine customer accounts, which led to customers incurring significant additional trading costs and realized losses.
Finally, the firm failed to establish, maintain and enforce a supervisory system that would have ensured compliance with FINRA’s rules and potentially prevented the misconduct in question.
Exchange Act Rule 15l-1 Regulation BI FINRA Rule 2010 FINRA Rule 2020 FINRA Rule 2111 FINRA Rule 3110
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |