Former associated person barred for allegedly refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Fenix Securities censured and fined for alleged compliance failings connected with nonregistered foreign individuals and its AML program
The firm permitted foreign individuals, not registered with FINRA in any capacity, to conduct securities business using the firm’s trading platform.
Despite the routine use of nonregistered foreign persons the firm:
- did not establish or maintain any policies or procedures concerning the registration obligations of these individuals;
- did not have in place any procedures that explained the permissible activities of nonregistered persons introducing business to the firm;
- failed to put in place WSPs that would provide guidance concerning payments of transaction-based compensation to foreign finders; and
- lacked a supervisory system or procedures to review trade confirmations of transactions using foreign finders to ensure the disclosure of foreign finder fees.
In addition the firm’s AML compliance program did not include procedures or guidance that:
- could be reasonably expected to detect and facilitate reporting of suspicious transactions; and
- would explain how to review for red flags of suspicious activities.
The firm conducted manual reviews of basic activity reports about all transactions that did not identify potentially suspicious activity, which FINRA found “was not reasonable given the volume of trading by the firm’s customers.”
The AML program did not develop and implement reasonable risk-based procedures for conducting ongoing customer due diligence including:
- understanding the nature and purpose of customer relationships in order to develop appropriate customer risk profiles;
- ongoing monitoring to identify and report suspicious transactions; and
- maintaining and updating customer information on a risk basis or conduct ongoing due diligence on customers.
The firm has agreed to an imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 1210
FINRA Rule 2010
FINRA Rule 2040
FINRA Rule 3110
FINRA Rule 3310
FINRA Regulatory Notice 19-18
NASD Rule 1031
NASD Notice to Members 02-21
Former securities representative suspended and fined for allegedly participating in an outside business activity without notice or authorization
FINRA Rule 2010
FINRA Rule 3270
Former securities representative suspended and fined for allegedly participating in an outside business activity without notice or authorization
FINRA Rule 2010
FINRA Rule 3270
Interactive Brokers censured and fined for allegedly incorrectly returning shares to customers
The firm utilized an algorithm to identify securities that it possessed an excess of and flag them for return to customers from whom shares were borrowed.
An update to this algorithm led to the firm inadvertently creating or increasing its segregation deficits. The algorithm did not correctly account for anticipated loan return activity that did not settle and the firm, which relied on the calculations to determine whether to return shares to customers, created or increased its existing share deficits as a result.
The firm did not establish or maintain a supervisory system that was reasonably designed to comply with its possession and control obligations.
In addition the firm allowed an unregistered person to lead and oversee some software development work connected to the firm’s securities finance business, including the securities lending program algorithm.
FINRA Rule 1210
FINRA Rule 2010
FINRA Rule 3110
SEA 1934 Rule 15c3-3
Former securities representative suspended and fined for allegedly making unsuitable investment recommendations to customers
The recommendations were not suitable given the customers’ low-risk investment profiles.
A disgorgement of $28,904.40 has been ordered.
FINRA Rule 2010
FINRA Rule 2111
Securities representative barred for allegedly refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Former securities representative barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
Securities representative suspended and fined for allegedly borrowing money from customers without notice or authorization
FINRA Rule 2010
FINRA Rule 3240
ViewTrade Securities censured and fined for alleged supervisory failures connected to outside brokerage accounts
The firm’s written procedures required registered persons to obtain consent for the opening of outside brokerage accounts and the maintenance and review of duplicate statements for these accounts.
However, the WSPs failed to identify the steps that would be taken to verify the receipt and review of the duplicate statements. They also did not include guidance explaining how the firm would detect and investigate potential securities violations.
The duplicates statements were manually reviewed by a single supervisor, with some remaining unexamined for more than six months after they were received.
FINRA Rule 2010
FINRA Rule 3110
Former securities representative suspended and fined for allegedly making unsuitable investment recommendations to customers
The recommendations were unsuitable based on the customers’ age, income, net worth, risk tolerance as well as the fact that the customers were not accredited investors. The recommendations also resulted in an unsuitable level of concentration of the customers’ liquid net worth in alternative investments.
A restitutionary payment of $16,357.60 has been ordered and the firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 2010
FINRA Rule 2111
Sustainable Development Capital fined for allegedly failing to conduct independent testing of its AML program
The firm was required to conduct an independent test of its AML compliance program every other calendar year, but failed to conduct such testing between 2021 and 2024.
The firm has agreed to the imposition of an undertaking requiring it to certify in writing the remediation of the issues identified as well as the completion of the independent testing required.
FINRA Rule 2010
FINRA Rule 3310
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |