Securities principal suspended and fined for allegedly mismarking order tickets as unsolicited
The principal had recommended the more than 500 equity transactions and so should have marked the orders as solicited.
He had also exercised discretion in four customer accounts without obtaining prior written authorization from the customers.
FINRA Rule 2010
FINRA Rule 3260
FINRA Rule 4511
Former securities representative charged with allegedly taking non-public personal information of customers from his firm
The representative downloaded files from the firm’s database containing customer names, Social Security numbers, phone numbers, addresses, birth dates, account numbers, and account values and emailed this information to himself on several occasions before leaving the firm.
An affidavit signed by the representative included false statements about his actions and the representative also made false statements to his new firm about the source of the customer information available to him.
In addition the representative opened five unapproved accounts in which securities transactions could be effected without authorization from his firm.
FINRA Rule 2010
FINRA Rule 3210
Securities principal suspended and fined for allegedly falsifying customer signatures
145 account documents were signed electronically on behalf of 58 customers. The transactions were authorized and none of the customers complained.
FINRA Rule 2010
FINRA Rule 4511
Investment representative suspended and fined for allegedly falsifying 21 documents relating to two customers
The representative added or reused signatures and added false dates to some signature pages.
FINRA Rule 2010
FINRA Rule 4511
Former CCO (now securities principal) suspended and fined for allegedly failing to supervise a registered representative
In his role as supervisor the CCO was responsible for maintaining the firm’s WSPs, but “failed to include any procedures regarding the suitability of recommendations or the supervision of such recommendations.”
The WSPs did not address the Reg BI obligations connected with the sale of alternative investments or higher risk products and did not address concentration risk.
The CCO also failed to reasonably supervise a representative who sold bonds to seven retail customers that were neither suitable nor in their best interest given their investment profiles and risk tolerance.
In addition the CCO was aware that the representative in question “routinely engaged in email communication from an outside, personal email account” about the firm’s securities business, but did not take any reasonable steps to halt this practice or to ensure that the business-related electronic communications were preserved or subjected to supervisory review.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 4511
Investment Network Inc. censured, suspended and fined for various alleged types of misconduct; the firm’s CEO / CCO suspended and fined
The firm:
- failed to disclose a conflict of interest by providing inaccurate information about the firm’s financial incentive for recommending private placement offerings of pre-IPO funds;
- did not conduct reasonable due diligence and so did not have a reasonable basis for recommending the offerings;
- failed to implement a customer identification program in connection with the offerings;
- did not file the private placement memorandum and other offering documents required;
- failed to establish, maintain and enforce a supervisory system reasonably designed to achieve compliance with:
- Reg BI and FINRA Rules relating to the sale of private placements and the identification and addressing of excessive trading; and
- Reg BI more generally.
The firm has been suspended from conducting any private placement activities for 60 days and has agreed to an undertaking requiring it to certify in writing the remediation of the issues identified. The certification is to include a narrative description supported by evidence to demonstrate this.
A disgorgement of $63,796.60 plus interest has been ordered.
In addition to the suspension and fine the CEO / CCO is required to requalify as a general securities principal before being able to act in this capacity with any FINRA member.
FINRA Rule 2010
FINRA Rule 3310
FINRA Rule 5123
FINRA Regulatory Notice 10-22
SEA 1934 Rule 15l-1
SEC Reg BI
CICC US Securities censured and fined for alleged AML program failures
The firm failed to establish an AML program reasonably designed to detect and investigate red flags of suspicious activity. Amongst other things the firm’s AML program:
- was not tailored to account for the firm’s business model and types of customers it served;
- did not include a reasonable means of detecting suspicious activity in trades executed on non-US exchanges;
- did not include reasonable reviews of trades in low-price securities; and
- failed to include a supervisory system reasonably designed to detect and report potentially suspicious trading in its stock buyback business.
The firm also did not have a supervisory system in place that was reasonably designed to ensure that trades were accurately recorded as unsolicited or solicited.
And finally the firm allowed three unregistered individuals to serve as authorized signatories for three firm bank accounts.
FINRA Rule 1210
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 3310
FINRA Regulatory Notice 19-18
NASD NTM 02-21
NASD NTM 02-47
Former 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 refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Former securities principal barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |