Former securities representative suspended and fined for allegedly using an unauthorized personal device to transmit client documents
The representative also initially provided a false denial to her firm and to FINRA about this unsanctioned personal device usage. The provision of false information may possibly be acting as a key aggravating factor that led to the imposition of a sizeable 15-month suspension along with a fine in this case.
FINRA Rule 2010 FINRA Rule 4511 FINRA Rule 8210
Park Avenue Securities censured and fined for alleged supervisory failures connected to a registered representative’s undisclosed outside business activity
The company’s email review system flagged 26 emails suggesting that the representative may have been involved in outside business activity. Only one of those emails was escalated and closed without further investigation following the representative denying any knowledge of the outside business in question. The firm has been given 90 days to remediate the issues identified during the course of FINRA’s investigation.
FINRA Rule 2010 FINRA Rule 3110
Former securities principal suspended and fined for allegedly failing to ensure the suitability of investments
A reasonable analysis of the suitability of the specific illiquid products in question was not conducted and increases to customer’s risk tolerance, which permitted their purchase of these securities, were not reasonably investigated despite constituting “red flags that required additional scrutiny”.
FINRA Rule 2010 FINRA Rule 3110
The suspension of a securities representative for violations of his firm’s prearranged trading prohibition and the circumvention of its cross trade procedures affirmed by the National Adjudicatory Council following an appeal
The seriousness of the infractions as well as a number of aggravating factors, including “a pattern of wrongdoing” and a “lack of remorse” has led to an increase of the Hearing Panel’s initial sanction, a suspension of 30 days, to two consecutive suspensions of three months each along with an order requiring the securities representative to requalify. The fact pattern here is an interesting one as it involves reliance by enforcement for recorded audio conversations along with some good procedural points, including what constitutes an appropriate timeframe for the filing of a complaint by FINRA.
(This is a National Adjudicatory Council Decision and not an AWC)
FINRA Rule 2010 MSRB Rule G-17
Former securities representative barred for alleged misrepresentation and false and misleading communication
The investors’ funds had been intended for an investment fund, but had instead been diverted as loans to various small businesses owned by the representative and his friends and associates. The businesses defaulted on the loans. When the investors enquired about their fund, the representative produced fictitious account statements and text messages misrepresenting the situation and omitting information that was material (ie that the funds invested were gone).
FINRA Rule 2010 FINRA Rule 2210
Vanguard Marketing Corp. censured and fined for allegedly overstating projected yield and annual income of nine money market funds
The overstatement was the result of a technical issue involving a data feed that did not overwrite existing data. In addition other problems affected the performance information presented to customers, some of whom contacted the firm to draw its attention to the resulting miscalculations. The firm also failed to promptly investigate the reported issues.
FINRA Rule 2010 FINRA Rule 2210 FINRA Rule 3110 FINRA Rule 4511
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
