BMA Securities, El Segundo, Censured, Fined $325,000 and Review Ordered by FINRA

Soreide Law Group, Securities Arbitration Law Firm (888) 760-6552, recently obtained this information from the FINRA website under “Disciplinary and Other FINRA Actions, January, 2015.”

BMA Securities aka Burt Martin Arnold Securities, Inc. (CRD #108219, El Segundo, California)

was censured, fined $325,000 and ordered to retain, within 30 days of the date of the Notice of Acceptance of the AWC, an independent consultant, not unacceptable to FINRA, to conduct a comprehensive review of the adequacy of the firm’s policies, systems and procedures (written and otherwise) and training related to anti-money laundering (AML) compliance and monitoring, including specifically but not limited to delivery versus payment/receive versus payment (DVP/RVP) accounts, deposit and sale of low-priced securities and due diligence for correspondent accounts for foreign financial institutions.

Allegedly, BMA Securities sold certain shares of an issuer whose securities were not registered and were not subject to an applicable exemption from registration. FINRA's findings stated that despite the presence of “red flags,” BMA Securities approved the sale, concluding the customers were not acting in concert. That conclusion was not reviewed or revisited, even after six of the customers sold approximately four million shares six days later, all in one day. BMA Securities continued to accept for deposit and then sell out the issuer’s shares for the group’s accounts. No additional investigation was conducted. BMA Securities failed to undertake sufficient efforts to ascertain whether the stock could be properly sold, and accordingly did not satisfy its duty to conduct a reasonable inquiry, which is a crucial part of the brokers’ exemption.

Also, FINRA's findings stated that BMA Securities failed to establish, maintain, and implement a reasonable supervisory system and WSPs. BMA Securities also failed to establish and implement an adequate AML program. BMA Securities failed to establish an adequate Customer Identification Program (CIP) and failed in certain circumstances to gather appropriate documentation about the customers. BMA Securities also failed to establish and implement a system that was reasonably designed to achieve compliance with the requirement that the firm conduct due diligence and enhanced due diligence, where applicable, on correspondent accounts for foreign financial institutions.

FINRA's findings also included that BMA Securities failed to provide customers with disclosures of the profits to the firm and a former trader of BMA Securities, in situations where the trader bought exchange-traded securities positions from customers into his trading account and then sold them out to the market at a profit.
(FINRA Case #2010023220502)

This ends the summation of information from FINRA’s website.

If you have suffered financial losses due to your broker/dealer's recommendations, please call Soreide Law Group for a free consultation with an attorney: 888-760-6552.