Former securities representative barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
Former securities representative suspended and fined for allegedly failing to disclose liens and judgements on Form U4
FINRA Rule 1122
FINRA Rule 2010
Securities representative charged with alleged unauthorized trading
The representative, who was also managing principal, CEO and COO of Old Slip Capital effected six transactions without authorization from customers.
The unauthorized trading caused customer losses of approximately $44,500.
In his response to FINRA investigating the alleged unauthorized transactions the representative provided false and misleading written statements and also provided false and misleading testimony in response to requests from FINRA staff.
FINRA Rule 2010
FINRA Rule 8210
Cambria Capital censured for allegedly charging unfair commissions
The firm also failed to establish and maintain a supervisory system that would ensure that customers were not charged unfair or unreasonable commissions.
In addition the firm did not have in place a supervisory system that would ensure compliance with Reg BI and rules related to excessive trading.
Specifically the firm’s WSPs “did not include any guidance on how to calculate or assess an account’s turnover rate or cost-to-equity ratio or describe any reports that should be used in order to identify potential excessive trading.”
The supervisory system for detecting potential excessive trading was limited to firm principals reviewing the daily trade blotter, which did not provide any information:
- on trading patterns in customer accounts
- about the turnover rate or cost-to-equity ratio or the cumulative costs of trading in customer accounts
Exception reports containing information on customer accounts flagged for meeting certain thresholds were available from the firm’s clearing partner. However, the firm and its principals did not access or review these reports.
The firm also failed to put in place a supervisory system that would ensure compliance with suitability obligations in connection with recommendations of non-traditional and volatility linked ETPs.
A restitutionary payment of $48,435.76 plus interest has been ordered.
FINRA Rule 2010
FINRA Rule 2121
FINRA Rule 2121.01
FINRA Rule 3110
SEA 1934 Rule 15l-1
SEC Reg BI
Seaport Global Securities censured and fined for allegedly failing to supervise busting and adjusting activity by its options trading desk
The firm had no supervisory system in place for reviewing manual options trades that were busted and adjusted by the desk.
The firm’s procedures did not provide any guidance to its staff on the circumstances under which the options desk was permitted to request that a trade be busted or adjusted.
A system or procedure to address compensation for the firm’s customer in the event the requested bust and adjust would result in a worse price for the customer.
And the firm failed to put in place supervisory systems or procedures to verify the completeness and accuracy of the order memoranda for such trades.
Finally, the firm failed to make and keep current complete and accurate order memoranda in connection with four busted and adjusted trades.
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 3110
FINRA Rule 4511
SEA 1934 17a-3
UBS Financial Services censured and fined for alleged compliance shortcomings connected with its suitability obligations
The firm did not have any WSPs or guidance for its representatives specific to the suitability of holding periods for purchases of syndicate preferred stock. And the firm’s procedures did not identify any concerns with the short-term trading of such stock positions.
Trading of this stock was supervised through an electronic surveillance system, which generated a report that would be manually reviewed.
However, the report’s parameters were “unduly narrow”, which meant that only a small proportion of potentially problematic trades were flagged. Even when the trades were flagged no reasonable action was taken to follow-up and investigate.
A restitutionary payment of $343,914.66 plus interest and a disgorgement of $2,645,537 plus interest have been ordered.
FINRA Rule 2010
FINRA Rule 3110
Insigneo Securities censured and fined for allegedly failing to supervise private securities transactions
The firm’s supervisory procedures prohibited registered representatives from participating in private securities transactions.
Upon discovering a representative’s participating in such transaction the firm implemented a conditional exception to this prohibition in order to permit him to sell private placements through an unaffiliated investment advisor.
The representative proceeded to sell securities associated with six private placements totalling $9.75m to 25 investors, 8 of whom were also firm customers.
The firm did not conduct a contemporaneous review of the offering or investors and did not determine whether it was required to record the transactions on its books and records.
In addition the firm also failed to report, inaccurately reported or overreported transactions to TRACE.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 6730
Former securities representative suspended and fined for allegedly sharing transaction-related compensation with an unregistered person
FINRA Rule 2010
FINRA Rule 2040
Cambridge Investment Research censured for allegedly failing to supervise the applications of sales charge waivers and fee rebates
The charge waivers and fee rebates were connected to the rights of reinstatement available to eligible mutual fund customers.
The firm failed to reasonably supervise the application of such rights of reinstatement and failed to provide customers with benefits connected with these.
A restitutitionary payment of $699,217 plus interest has been ordered.
The firm was offered credit for extraordinary cooperation in connection with this matter.
FINRA Rule 2010
FINRA Rule 3110
Osaic Wealth censured for allegedly failing to supervise the applications of sales charge waivers and fee rebates
The charge waivers and fee rebates were connected to the rights of reinstatement available to eligible mutual fund customers.
The firm failed to reasonably supervise the application of such rights of reinstatement and failed to provide customers with benefits connected with these.
A restitutitionary payment of $3,096,490 plus interest has been ordered.
The firm was offered credit for extraordinary cooperation in connection with this matter.
FINRA Rule 2010
FINRA Rule 3110
Former securities representative barred for allegedly falsifying consolidated accounts statements
At least 190 consolidated accounts statements for at least eight customers were altered by overstating the account balances and reflecting fictitious investments in a hedge fund.
The representative also provided false and misleading information to FINRA and falsely testified in his on-the-record testimony.
FINRA Rule 2010
FINRA Rule 8210
Edward Jones censured for allegedly failing to supervise the applications of sales charge waivers and fee rebates
The charge waivers and fee rebates were connected to the rights of reinstatement available to eligible mutual fund customers.
The firm failed to reasonably supervise the application of such rights of reinstatement and failed to provide customers with benefits connected with these.
A restitutitionary payment of $4,440,979 plus interest has been ordered.
The firm was offered credit for extraordinary cooperation in connection with this matter.
FINRA Rule 2010
FINRA Rule 3110
Wells Fargo censured and fined for alleged inaccurate transaction reporting
The firm submitted approximately 22,000 blue sheets to FINRA containing inaccurate information.
This was the result of software coding errors that caused the firm to:
- misreport the exchange where trades were executed;
- misidentify the registered representative for trades;
- report customer names and addresses as “privacy protected”;
- misreport taxpayer identification indicators for some accounts;
- misreport average price indicators;
- misreport the order execution time of certain dividend investments;
- incorrectly report buy/sell codes for certain options transactions; and
- incorrectly report state and/or zip code information.
FINRA Rule 2010
FINRA Rule 8211
FINRA Rule 8213
LPL Financial censured and fined for alleged inaccurate transaction reporting
The firm submitted approximately 5,800 blue sheets to FINRA containing inaccurate information.
The errors were the result of a combination of software coding issues and human error and caused the firm to:
- omit response transactions from some blue sheets;
- incorrectly report the customer’s address, state and employer for certain trades; and
- incorrectly report the execution time for trades allocated to customer accounts.
FINRA Rule 2010
FINRA Rule 8211
FINRA Rule 8213
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
