Park Avenue Securities LLC Censured and Fined by FINRA Over Supervisory Procedures

Soreide Law Group obtained the following information from FINRA’s January 2017 disciplinary report.  Soreide Law Group also has pending litigation against Park Avenue Securities, also due to alleged lack of supervision.

Park Avenue Securities LLC (CRD #46173, New York, New York)
was censured and fined $195,000 by FINRA for allegedly failing to enforce its Written Supervisory Procedures (WSPs) regarding the monitoring of client trades, and failed to establish and maintain a supervisory system reasonably designed to follow up on the performance of its supervisors with regard to monitoring trade executions.
FINRA’s findings stated that Park Avenue Securities also failed to establish, maintain, and enforce a supervisory system reasonably designed to review and monitor the transmittal of funds from its client accounts to third-party accounts and outside entities. As a result of these deficiencies, Park Avenue Securities failed to detect the unauthorized sales of securities and the wiring of funds by a firm unregistered administrative assistant who misappropriated approximately $255,300 from the accounts of two elderly clients over a period of more than three years.
Park Avenue Securities lacked a reasonable system of follow-up and review to ascertain that its agency control officers (ACOs) were properly performing their delegated function of comparing order tickets with transaction blotters and trade confirmations. Although the firm conducted annual examinations of its Office of Supervisory Jurisdiction (OSJs), such as the one that supervised the detached branch office where the unregistered administrative assistant worked, these examinations did not evaluate whether the ACOs properly reviewed and matched transaction logs and order tickets. As a result of these supervisory failures, the registered administrative assistant evaded detection of her misappropriation scheme for more than three years. Because the firm failed to match order tickets with transaction log entries on a consistent basis, it did not determine that the administrative assistant failed to record some of the orders on the branch office’s transaction log. In addition, because the ACO failed to match order tickets with trade confirmations, he was unable to determine that some of the orders were never sent to him for review.
The failure of Park Avenue Securities’ supervisory system to include in its annual examinations of its OSJs any process to evaluate whether the ACOs had properly reviewed and matched order tickets with transaction logs and trade confirmations was unreasonable.
FINRA’s findings also stated that the firm’s supervisory control system failed to include a policy or procedure requiring a review to detect or prevent the transmittal funds from multiple clients going to the same third-party account, such as the creation of reasonably tailored exception reports. Consequently, Park Avenue Securities failed to detect that the administrative assistant had initiated 63 unauthorized wire transfers, totaling approximately $255,300, out of the clients’ accounts, to a bank account she owned. Upon learning of her conduct, the firm conducted an investigation and subsequently reimbursed the clients for the funds misappropriated from their accounts.
(FINRA Case #2014041510202)
Please see our blog regarding another Park Avenue Securities broker:

Lizabeth G. Ty, Formerly with Houston's Park Avenue Securities, Barred by FINRA

Soreide Law Group is currently involved in litigation against Park Avenue Securities.  If you were a client of New York’s Park Avenue Securities LLC and experienced losses due to their recommendations or actions, contact Soreide Law Group for a no-cost consultation with a lawyer regarding the possibility of recovering your losses at:  888-760-6552.