Securities Lawyer Blog | Victim of Fraud?

TAG | unauthorized transactions by broker

Feb/12

29

Weston, FL, Rep Sanctioned by FINRA

Comments off · Posted by Securities Lawyer in FINRA

The following information was obtained on FINRA’s website’s ‘Disciplinary Actions, February 2012.”
 
Jeffrey Scott Donner (CRD #2631248, Registered Principal, Weston, Florida)
 
was barred from association with any FINRA member in any capacity. The sanction was based on findings that Donner executed several unauthorized transactions in customers’ accounts at his member firm without their knowledge and consent.
 
These findings stated that Donner exercised discretion in a customer’s account without written authorization; Donner neither sought nor obtained the customer’s or his member firm’s authorization.
 
These findings also stated that Donner used his personal email account to send business-related emails to customers and admitted to FINRA that he used an unapproved, personal email account to send emails to and receive emails from his customers.
 
The findings also included that his firm’s WSPs required that the firm review email communication between registered representatives and customers, but Donner did not forward any of these emails to the firm for review. FINRA found that Donner’s use of his personal email account prevented his firm from accessing these customer communications and complying with its obligations to review correspondence between registered representatives and their customers, and from complying with its recordkeeping requirements.
(FINRA Case #2009020228501)
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.

· · · · · · · · · · · · · · · · · · · · · ·

Feb/12

28

The SEC Warns Firms Regarding Policing of Unauthorized Trades

Comments off · Posted by Securities Lawyer in FINRA

In a February 28th., 2012 article written by Liz Skinner for InvestmentNews.com, Skinner writes that the top securities regulator in the U.S. wants investment advisers and brokers to take a closer look at certain trading behaviors to help root out unauthorized trading in accounts.

The Securities and Exchange Commission (SEC) said Monday in a risk alert that changes in trading patterns, a high volume of trade cancellations or corrections, manual trade changes and unexplained profits for a particular trader or client are all conditions that could warrant scrutiny.

Skinner goes on to say that unauthorized trades might include rogue trades in client or proprietary accounts, creation of records of sham transactions or trades that exceed risk tolerances, the commission noted. Perpetrators could include traders, assistants on trading desks, portfolio managers, brokers, risk managers, advisers or other personnel — even those in administrative positions in the back office.

The InvestmentNews.com article said the alert, issued by the Office of Compliance Inspections and Examinations, said firms should review their compliance and supervisory procedures to see where improvements could be made. The regulator said such heightened oversight might include stress testing, independent trading reviews and possibly policies that would not allow traders to have remote access to trading accounts. Firms also should consider how compensation and other incentives are aligned with “responsible risk-taking,” the alert said.

Todd Cipperman, a compliance attorney in Wayne, Pa., said it’s noteworthy that the commission’s exam staff is taking on this issue. Typically, rogue trading is addressed by the Financial Industry Regulatory Authority Inc., the self-regulatory organization for brokers writes Skinner.

In noting that advisers and brokers have different regulatory requirements, the alert stated that both professions face “financial and reputational losses” from unauthorized trading.

“Unauthorized trading is not a new problem, and the risks it poses should be a perennial concern to financial firms as well as to regulators,” said Carlo di Florio, director of OCIE.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
 
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Oct/11

26

UBS will pay $12M over Short-Sales Settling FINRA Claim

Comments off · Posted by Securities Lawyer in FINRA

In a Bloomberg News article from October 25, 2011, we learn that UBS AG, Switzerland’s largest bank, will pay $12 million to resolve Financial Industry Regulatory Authority claims that a brokerage unit allowed millions of short-sale orders to be placed without reasonable grounds to believe that the securities could be delivered.

The article points out that the supervisory system for locating and marking orders at UBS Securities LLC was “significantly flawed” and contributed to violations across its equities-trading business, Washington- based Finra said. The company’s framework wasn’t designed for regulatory compliance until at least 2009, the industry-funded brokerage watchdog said.

For a short sale, an investor sells a security it doesn’t own, betting the price will decline before it’s time to deliver the shares. Under a rule known as Reg SHO, brokers can only accept short-sale orders when they can reasonably ensure the shares needed to cover the bets will be available to the investor at the time of delivery.

“Firms must ensure their trading and supervisory systems are designed to prevent the release of short-sale orders without valid locates, and properly mark sale orders, in order to prevent potentially abusive naked short selling,” Brad Bennett, Finra’s head of enforcement, said in the regulator’s statement. “The duration, scope and volume of UBS’s locate and order- marking violations created a potential harm to the integrity of the market.” In settling the claims, UBS consented to the findings without admitting or denying wrongdoing, Finra said.

Substantial Investments

“UBS made a substantial investment to upgrade systems and procedures, including supervisory protocols, IT change control processes, and compliance programs to tighten its Reg SHO controls,” Christiaan Brakman, a spokesman for the Zurich-based bank, said in an e-mailed statement. “This investigation is concluded and all issues identified by Finra and UBS have been remediated.”

UBS’ internal controls came under scrutiny last month after Kweku Adoboli, a trader who worked on the exchange-traded funds desk in London, was arrested for allegedly racking up $2.3 billion in losses from unauthorized trading. Adoboli, who has been in custody since his Sept. 15 arrest, is expected to enter a plea on the accusations at a Nov. 22 hearing.

According to the Bloomberg News article, the bank said  it filed a document to the U.S. Securities and Exchange Commission, stating that management has determined its internal controls weren’t effective on Dec. 31, 2010. UBS has taken and continues to implement measures to address the deficiencies, it said.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you feel you have become a victim of short-sale losses through UBS Securities, 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.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Find it!

Theme Design by devolux.nh2.me
To top