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TAG | failure to supervise company policies

Apr/12

26

Ponte Vedra Beach, FL, Rep Fined and Suspended by FINRA

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The following information is from FINRA’s website under “Disciplinary Actions, April, 2012:”
 

James Calvin Wylie Jr. (CRD #834405, Registered Representative, Ponte Vedra Beach, Florida) 

submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for one month. Without admitting or denying the findings, Wylie consented to the described sanctions and to the entry of findings that he engaged in unapproved outside business activities when he provided consulting and analytical services on potential business transactions, outside the scope of his relationship with his member firm and without providing prompt written notice to his firm. The findings stated that Wylie inaccurately certified on an annual outside business activities questionnaire that he was not involved in any outside business activities.

This suspension was in effect from March 5, 2012, through April 4, 2012.

(FINRA Case #2010024027601)

 

The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

 

 

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Apr/12

24

E*Trade Capital Markets, LLC, Censured and Fined by FINRA

Comments off · Posted by Securities Lawyer in FINRA

 The following information is from FINRA’s website under “Disciplinary Actions, April, 2012:”

E*Trade Capital Markets LLC (CRD #111528, Chicago, Illinois) 

submitted a Letter of  Acceptance, Waiver and Consent in which the firm was censured, fined $45,000, required to pay $812.13, plus interest, in restitution to customers and to revise its WSPs regarding trade reporting. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that in transactions for or with a customer, it failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions.

These findings stated that the firm failed to submit the market on open special handling code to OATS, and in one instance also failed to submit a new order report to OATS; failed to submit OATS information for proprietary orders not related to the firm’s market-making activity; failed to submit route reports; and improperly submitted execution reports to OATS, and in one instance submitted an inaccurate cancellation time. The findings also stated that the firm’s supervisory system for its Dempsey Unit Trading Desk did not provide for supervision reasonably designed to achieve compliance with applicable laws, regulations and FINRA rules concerning trade reporting (reporting trades accurately and timely, and the proper use of trade modifiers). 

These findings also included that the firm failed to provide documentary evidence that on the trade dates reviewed, it performed the supervisory reviews for its market-making desk set forth in its WSPs concerning trading and/or quoting during a trading halt. FINRA found that the firm transmitted trade reports for odd-lot trades and failed to report the transactions with the required odd-lot modifier of .RO to the NASD®/NASDAQ Trade Reporting Facility (NNTRF).

(FINRA Case #2008013636701)

 

The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com. 

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Apr/12

24

Broker and Firm Sanctioned and Fined by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The following information is from FINRA’s website under “Disciplinary Actions, April, 2012:”
 

Cantone Research Inc. (CRD® #26314, Tinton Falls, New Jersey) and Christine L. Cantone (CRD #2687618, Registered Principal, Thompson, Pennsylvania)

 

submitted an Offer of Settlement in which the firm was censured, fined $25,000, $10,000 of which was jointly and severally with Christine Cantone, and ordered to pay a total amount of $200,000 in partial restitution to customers, jointly and severally with Christine Cantone. Christine Cantone was suspended from association with any FINRA member in any principal capacity for three months.

Without admitting or denying the allegations, the firm and Christine Cantone consented to the described sanctions and to the entry of findings that Christine Cantone, as the firm’s vice president and chief compliance officer (CCO), failed to reasonably supervise a registered representative who was able to continue engaging in a scheme through which he sold fictitious investments to firm customers and misappropriated more than $1.6 million of their funds. Throughout the time of the registered representative’s association with the firm, Christine Cantone was aware of certain “red flags” that should have alerted her to the misconduct but failed to reasonably follow up on those indications of possible misconduct.

These findings stated that Christine Cantone was responsible for enforcing the firm’s procedures regarding the monitoring and review of employee transactions in outside accounts, and for reviewing incoming and outgoing paper and electronic correspondence for the firm’s registered representatives. The findings also stated that upon the registered representative’s association with the firm, he disclosed an account at another member firm. Christine Cantone asked him to transfer the account to the firm and he objected, citing several reasons, including that he needed to pay certain bills from the account.

Christine Cantone acquiesced and permitted the registered representative to retain his account at the other member firm. The findings also included that Christine Cantone regularly reviewed statements from the account, which alerted her to unusually large deposits in the account. Concerned that the registered representative might be engaging in outside business activities or private securities transactions, Christine Cantone questioned him about the origin of the funds but accepted the registered representative’s explanation that the deposits were related to real estate sales or to his relative’s supposed antique business, and did not request supporting documentation or make any other efforts to verify those representations.

 FINRA found that even when presented with direct evidence of the registered representative’s deposit of customer funds into the account, Christine Cantone continued to rely on his unverified representations. As a result of Christine Cantone’s failure to supervise the representative, he was able to continue his misappropriation scheme unabated while registered at the firm. FINRA also found that although the firm had general procedures requiring the disclosure of outside brokerage accounts, the provision of duplicate statements for those accounts and the questioning of registered representatives about suspect transactions in those accounts, the written supervisory procedures (WSPs) lacked specific requirements, and the firm otherwise failed to provide for reasonable follow-up or review of such suspect transactions, such as requesting documentation on questionable transactions, comparing deposit activity in the outside accounts to withdrawal activity in customer accounts, or speaking with customers. As a result, the firm failed to establish and maintain a supervisory system and establish, maintain and enforce WSPs reasonably designed to achieve compliance with applicable securities laws and regulations with regard to monitoring the activity of its registered representatives in outside brokerage accounts.

Christine Cantone’s suspension is in effect from March 19, 2012, through June 18, 2012.

(FINRA Case #2009020383002)

 

The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

 

 

 

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Mar/12

6

Coral Gables, FL, Brokerage Censured and Fined by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The following information was obtained on FINRA’s website’s ‘Disciplinary Actions, February 2012.”
 
Mercantil Commercebank Investments Services (CRD #117284, Coral Gables, Florida)
 
submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $20,000 and required to report to TRACE the transactions that were not previously reported.
 
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to report transactions in TRACEeligible securities to TRACE that it was required to report. The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules concerning TRACE reporting.
(FINRA Case #2011027361001)
 
The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

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Mar/12

5

Boca Raton, FL, Brokerage Fined by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The following information was obtained on FINRA’s website’s ‘Disciplinary Actions, February 2012.”
 
Revere Securities Corp. (CRD #14178, Boca Raton, Florida)
 
submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $15,000 and required to revise its WSPs (Written Supervisory Procedures)  regarding OATS (Order Audit Trail System) reporting.
 
Without admitting or denying these findings, the firm consented to the described sanctions and to the entry of findings that it failed to transmit numerous ROEs (Return On Equity) to OATS on numerous business days; these ROEs represented more than half of all ROEs that the firm was required to transmit during that period.
 
The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules concerning OATS reporting.
(FINRA Case #2010021513501)
 
The information from FINRA’s website has ended.
 
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide.
For a free consultation with an attorney, please call 888-760-6552, or visit our website at: www.securitieslawyer.com.

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Dec/11

23

Elevation LLC, Fined and Censured by FINRA

Comments off · Posted by Securities Lawyer in FINRA

Elevation, LLC (CRD #140341, Charlotte, North Carolina)
 
submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000.
 
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it commenced an options business, engaged in options transactions and designated an individual as its Registered Options Principal (ROP) until his resignation from the firm.
 
These findings stated that the firm did not notify FINRA of his resignation but instead continued to engage in options business without registering a new ROP.
 
Also, the findings stated that the firm failed to establish, maintain and enforce an adequate supervisory system for its options activities, including written procedures, reasonably designed to achieve compliance with application securities regulations, and to supervise options transactions in which it engaged.
 
These findings also included that the firm failed to comply with multiple requirements of FINRA Rule 2360, the options rule, by failing to comply with its registration and customer agreement requirements.
 
(FINRA Case #2010021236201)
 
This information is from FINRA’s website’s ‘Disciplinary Actions,’ December, 2011.
 
Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have experienced losses through Elevation, LLC, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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Nov/11

29

LPL Financial Fined for ‘Oversights’ Involving Elderly Clients

Comments off · Posted by Securities Lawyer in FINRA

In a November 23, 2011, article in FA Magazine, Karen DeMasters writes that LPL Financial has been fined $100,000 for failing to properly oversee one of its brokers in Oregon who sold risky investments to people, many of them elderly and without the mental capacity to make investment decisions.

It was reported that the Oregon Division of Financial and Corporate Securities says LPL Financial, a division of LPL Investment Holdings Inc., has since improved it oversight procedures.

This fine stemmed from the actions of Jack Kleck, branch manager for LPL Financial in La Grande, Ore., who sold investments in high-risk oil and gas partnerships to nearly three dozen Oregon residents. Many of the investors were elderly and the investments were not suitable for the clientele, given their age and investment objectives, the division says.

The Oregon division found LPL Financial violated securities laws, including failing to diligently supervise the actions of its broker and failing to ensure company policies and procedures were enforced.

Jack Kleck’s securities license was revoked in 2007, barring him from doing business in Oregon, and a subsequent investigation led to the fine against LPL, says Melanie Mesaros, division spokeswoman. Kleck was fined $30,000. Many of Kleck’s clients were in their seventies and eighties and some were not capable, due to poor health, of making sound investment decisions, the division says.

“This case underscores the importance of investing with individuals and firms licensed by the state of Oregon,” says David Tatman, division administrator. “The state examines licensed brokerage firms and the division will take appropriate action against firms that do not comply with the law.”

DeMasters writes that LPL has taken numerous steps to improve its compliance and supervisory practices, the Oregon division says. The company has increased the number of employees devoted to compliance and supervision related functions, increased
its pre-sale review of transactions and enhanced branch office examinations.

Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member have experienced losses with LPL Financial or Jack Kleck, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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