Sentinel Brokers Company censured and fined for alleged failings connected with net capital
The firm treated funds transferred from an affiliate as ownership equity in its net capital calculations and FOCUS reports despite referring to these as loan proceeds.
The “firm should not have treated the funds as ownership equity without contemporaneous documentation supporting that treatment”, which was lacking.
Because of this improper treatment of the funds the firm was found to have conducted a securities business without maintaining the required minimum net capital and to have failed to file the required notices of its net capital deficiencies.
The firm also failed to make and preserve accurate books and records and filed five inaccurate FOCUS reports as a result of this issue.
FINRA Rule 2010
FINRA Rule 4110
FINRA Rule 4511
SEA 1934 Rule 15c3-1
SEA 1934 Rule 17a-3
SEA 1934 Rule 17a-5
SEA 1934 Rule 17a-11
FOCUS
Registered representative barred for alleged misrepresentations and material omissions to investors and FINRA
The representative was also charged with participating in an undisclosed outside business activity and not disclosing private securities transactions.
This is an extended hearing panel decision and not an AWC.
FINRA Rule 2010
FINRA Rule 3270
FINRA Rule 3280
FINRA Rule 8210
Securities representative suspended and fined for allegedly “structuring” cash transactions to avoid federal currency reporting requirements
368 cash transactions were intentionally broken up in order to avoid CTR reporting requirements.
The structuring activity interfered with the ability of the institutions involved “to effectively monitor his cash transactions” and “to comply with their reporting obligations” exposing both the representative’s employer and its banking affiliate to regulatory and reputational risk.
This is an extended hearing panel decision and not an AWC.
FINRA Rule 2010
Former securities representative barred for refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Stonecrest Capital Markets censured and fined for alleged inaccurate TRACE reporting
96 transactions were reported to TRACE, but were rejected by the system and the firm failed to report these again despite having received rejection messages.
35 inaccurate reports were also submitted to TRACE by the firm.
And the firm’s supervisory system was not reasonably designed to comply with TRACE reporting requirements with the firm failing to investigate and act upon red flags connected to such reporting.
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 6730
Former products representative barred for allegedly refusing to produce information and documents
FINRA Rule 2010
FINRA Rule 8210
GTS Securities censured and fined for alleged inaccurate order execution reports
The firm acquired a new business line involving ETFs and wholesale OTC market making. It used a proprietary reporting system to publish its monthly reports.
23 of these reports contained inaccurate order and execution quality statistics for covered orders.
The firm’s supervisory system was not reasonably designed to ensure compliance with the reporting obligations because it did not include “reasonable supervisory reviews of the statistical data to determine whether [the firm] was accurately calculating the statistics required by the rule.”
FINRA Rule 2010
FINRA Rule 3110
SEC Regulation NMS Rule 605
Cova Capital Partners censured and fined for alleged failings connected to private placements
The firm recommended three private placements to retail customers without conducting the due diligence required to form a reasonable basis for a determination whether the offerings were suitable and in the best interest of the customers.
The firm did not have in place a supervisory system reasonably designed to ensure compliance with its suitability and best interest obligations connected to private placements.
Finally, the firm failed to make a timely filing in connection with one private placement offering.
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 5123
FINRA Regulatory Notice 10-22
SEC Reg BI
SEA 1934 Rule 15l-1
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
