Former products representative suspended and fined for allegedly falsifying customer signatures
The names of 65 customers were signed on a total of 121 account documents. Two names on two documents were signed without the customers’ permission. All of the transactions were authorized and none of the customers complained.
FINRA Rule 2010 FINRA Rule 4511
Securities representative suspended and fined for allegedly falsifying customer signatures
Eight customer signatures on 11 applications were signed with the customers consent, but without an indication that they were being signed on their behalf.
FINRA Rule 2010
Former securities representatives suspended and fined for allegedly exercising discretionary authority to effect trades without obtaining prior authorization from four customers
At least 367 trades were mismarked as unsolicited in the accounts of the same four customers.
FINRA Rule 2010 FINRA Rule 4511
GTS Securities censured and fined for alleged compliance failures leading to erroneous order entry
The firm routed 635 erroneous orders generated by the firm’s trading engine to the market. Three algorithms were detrimentally affected by a technology change, but the controls for these were manually disabled because the firm did not detect the problem and came to the mistaken conclusion that its price band risk control was malfunctioning instead.
The firm’s price band risk control was deemed to be not reasonably designed to prevent the entry of erroneous orders and the firm “had no written policies, procedures, or controls regarding the process and criteria for overriding or disabling a market access risk control”.
FINRA Rule 2010 FINRA Rule 3110 SEA 1934 Rule 15c3-5
Former securities representative suspended and fined for allegedly falsifying documents
Customer signature pages were reused on seven firm documents on behalf of six customers and 18 documents were altered after they were signed by the customers.
FINRA Rule 2010 FINRA Rule 4511
Osaic Wealth and Securities America censured and fined for allegedly failing to safeguard customer records and information
Both firms relied on an enterprise level cybersecurity program provided by their corporate parent, but were permitted to develop their own security and data loss prevention controls. The firms were on notice from prior FINRA examinations that they lacked reasonable cybersecurity controls “such as multi-factor authentication for all email accounts, encryption for outbound emails with customers’ non-public personal information, and maintenance of email access logs”.
Osaic Wealth and Securities America experienced 24 cyber intrusions, which led to unauthorized third parties gaining access to the non-public personal information of approximately 32,640 customers.
Despite the intrusions neither firm enhanced its cybersecurity procedures or controls, even though an outside consultant was engaged to assist with their response to the incidents.
FINRA Rule 2010 FINRA Rule 3110
Former firm principal barred for allegedly failing to reasonably supervise trading in customer accounts and for failing to appear for on-the-record testimony
This is a default decision and not an AWC
FINRA Rule 2010 FINRA Rule 3110 FINRA Rule 8210 Reg BI
Former fingerprint person suspended and fined for allegedly cheating on an exam
FINRA Rule 1210.05 FINRA Rule 2010
M1 Finance censured and fined for alleged compliance failures connected to retail communications on the firm’s behalf by social media influencers
The firm paid influencers to post on its behalf in order to promote the firm’s services. The posts were “not fair and balanced or made claims that were exaggerated, unwarranted, promissory, or misleading”.
The firm also failed to review the influencers’ communications before they were posted and did not retain them as required.
The firm has also agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
GRIP has covered this case in more detail.
FINRA Rule 2010 FINRA Rule 2210 FINRA Rule 3110 FINRA Rule 4511 SEA 1934 Rule 17a-4
Stifel , Nicolaus & Company censured and fined for alleged compliance failures connected to the supervision of and misconduct by representatives with power of attorney over customer accounts
The firm did not have policies or procedures around the supervision of accounts where a representative of the firm possessed a power of attorney for customers.
A representative converted at least $105,00 from a customer by writing six checks made payable to himself. The firm failed to detect the conversion of the funds despite investigating one of the payments during a retroactive review. The representative’s actions were uncovered only when he attempted to transfer the remaining funds in the customer’s account to himself.
In addition the firm failed to reasonably respond to red flags raised by another representative’s unsuitable recommendations involving options and a high-risk security to multiple customers.
A restitutionary payment of $59,360.43 plus interest has also been imposed.
FINRA Rule 2010 FINRA Rule 3110 FINRA Regulatory Notice 09-64 NASD Rule 3010
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
