United First Partners censured and fined and its CCO suspended and fined for various alleged compliance issues at the firm
The firm did not put in place a system that was reasonably designed to supervise its associated persons’ outside brokerage accounts.
The CCO was designated “as the sole representative responsible for requesting and reviewing the outside brokerage account statements of the firm’s associated persons.” The CCO relied on a manual process to request these account statements “from time to time”, did not track which statements had been requested, and did not verify that the statements requested were supplied.
Only three to four outside brokerage accounts out of 40 were reviewed on a monthly basis.
In addition, the firm’s WSPs “did not contain provisions addressing how the firm would restrict or limit the information flow between research analysts and sales and trading personnel” and how conflicts between research analysts and those outside the research department would be managed.
The firm “permitted unrestricted interactions” between its research analysts and its sales and trading staff, including giving sales and trading personnel access to research reports prior to publication.
The CCO was fully aware of the content of the research reports and the practice of circulating pre-publication drafts of the research reports to sales and trading staff, but did not restrict the practice. She also failed to intervene to prevent research and sales staff from routinely communicating in internal chat rooms.
The firm failed to report certain fixed income orders from one of its customers to TRACE despite these being TRACE-eligible transactions. The firm’s WSPs did not address its TRACE reporting obligations for almost two years after it became a MSRB registrant.
The firm also failed to report certain securities orders from one of its customers to RTRS, failing to report any relevant RTRS transactions for almost five years after it became a MSRB registrant. Its WSPs did not address its RTRS reporting obligations and the firm failed to perform any supervisory reviews related to RTRS reporting.
Finally the firm did not provide its customers with complete information in its options transactions confirmations. Deficiencies included missing time stamps as well as information whether the firm was acting in a principal or agent capacity.
FINRA Rule 2010
FINRA Rule 2232
FINRA Rule 2241
FINRA Rule 2360
FINRA Rule 3110
FINRA Rule 5280
FINRA Rule 6730
FINRA Reg Notice 16-22
MSRB Rule G-14
MSRB Rule G-27
SEA 1934 Rule 10b-10
Former securities representative barred for allegedly failing to disclose his participation in private securities transactions
His participation in the transactions was extensive and included:
- conducting due diligence;
- providing feedback regarding the investment returns;
- introducing investors and offeror;
- introducing and recommending the investment to investors including his firm’s customers;
- acting as an intermediary between investors and offeror; and
- co-managing one of the companies in question.
The representative also communicated about the firm’s securities-related business using unapproved communications channels, falsely attesting on three separate occasions that only approved channels were utilized for business-related communications.
FINRA Rule 2010
FINRA Rule 4511
National Adjudicatory Council partially upholds Hearing Panel decision in the case of Alpine Securities Corporation
The Hearing Panel (panel) decision holding Alpine’s monthly account fee as unreasonable and unfairly discriminatory was upheld and the appeal arguments put forward by the firm that the panel erred in reaching this conclusion was rejected.
The panel’s decision that the imposition and charging of a securities certificate withdrawal fee constituted misconduct was reversed.
The finding that the firm caused unauthorized securities transactions and misused and converted customer funds and securities has also been affirmed.
The finding that the firm paid unfair prices in securities transactions has been partially affirmed. The decision is modified to dismiss allegations:
- that excessive commissions were charged by the firm; and
- of unfair pricing claims (as duplicative and not warranting a materially different sanction).
The finding by the panel of an unauthorized capital distribution by the firm was upheld.
Finally, the firm’s procedural challenges to the disciplinary proceedings were found to be “without merit”.
An expulsion of the firm is imposed, but will not become effective for 90 days after the time for Alpine to appeal the decision to the SEC has expired.
This is a NAC decision and not an AWC. It is a comprehensive decision by the appeals panel in a complex case that is worth reviewing in detail as it touches on some important aspects of the rules and regulations around fees and firm organization.
FINRA Rule 2010
FINRA Rule 2121
FINRA Rule 2122
FINRA Rule 2150
FINRA Rule 4110
Former securities representative barred for allegedly refusing to produce information and documents
FINRA Rule 2010
FINRA Rule 8210
Former securities representative suspended and fined for allegedly incorrectly recording forward start reverse repo positions
This was done in order to conceal unrealized losses and resulted in the falsification of firm records.
This is an order accepting an offer of settlement and not an AWC.
FINRA Rule 2010
USCA Securities censured and fined for allegedly failing to maintain its minimum required net capital
The capital deficiencies were caused by allocated the incorrect number of shares for offerings when calculating the underlying securities value. The OCC charge associated with each offering was miscalculated as a result.
The errors led to the firm maintaining inaccurate books and records and the filing inaccurate FOCUS reports.
Finally, the firm failing to establish a supervisory system reasonably designed to ensure adherence with net capital requirements.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 4110
SEA 1934 Rule 15c3-1
FOCUS
Former securities representative suspended and fined for allegedly downloading and transferring confidential customer information
Information related to over 1,300 firm customers, including non-public personal details such as social security numbers, addresses and birth-dates, was downloaded and sent to non-firm email addresses and provided to another firm.
The representative also made false statements to his firm and to FINRA in connection with the transfer.
Finally, the representative opened five outside accounts in which securities transactions could be affected without notice to or prior approval from his firm.
This is an order accepting an offer of settlement and not an AWC.
FINRA Rule 2010
FINRA Rule 3210
Former securities representative barred for allegedly refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Former securities representative barred for allegedly failing to provide documents and information and appear for testimony as requested
This is an order accepting an offer of settlement and not an AWC.
FINRA Rule 2010
FINRA Rule 8210
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
