Parkland Securities, LLC (Parkland) f/k/a Sammons Securities Company, LLC, was fined $100,000 by the Financial Industry Regulatory Authority (FINRA) for numerous failure to supervise violations. Without admitting or denying the findings, Parkland consented to the sanctions and to FINRA’s findings.
FINRA found that Parkland relied too heavily upon an outside entity with a limited number of persons to conduct all of the supervisory and compliance functions for its 1,274 registered representatives and 854 branch offices. Also, FINRA found that Parkland’s system for reviewing its employees’ emails was inadequate, as was its system for the supervision of its customers’ confidential information, such as ensuring its representatives were using passwords, anti-virus software and anti-spyware tools. FINRAs findings also included Parkland’s failure to conduct adequate due-diligence with respect to structured products it had recommended to customers. Parkland allegedly neglected to implement and maintain written supervisory procedures for determining the suitability of these investments for its customers.
Brokerage firms have the responsibility and duty to supervise the actions of their employees. When they fail to do so, it can have a significant negative impact on the investors, from financial losses to breaches of sensitive confidential information.
In order to protect investors, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of these rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker dealers and their supervisors do not establish and implement these protective supervisory measures, they may be held liable to investors for losses flowing from the misconduct. As a result, investors who have suffered losses stemming from a stockbroker or registered representative’s misconduct can bring forth claims to recover damages against brokerage firms like Parkland Securities, which have a duty to supervise its employees in order to prevent unnecessary investor losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.