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Oriental Financial Services Fined for Municipal Securities Mismanagements

Oriental Financial Services Corp. (OFS) of San Juan, Puerto Rico submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Market Regulation of the Financial Industry Regulatory Authority (FINRA) for allegedly purchasing municipal securities for its own account from customers and then selling those municipal securities to other customers at prices that were not fair or reasonable.

Between July 1, 2013 and September 30, 2013 FINRA investigators found multiple transactions in which OFS was not fair or reasonable to its customers. FINRA alleged OFS failed to take into consideration all relevant factors, including the best judgment of the broker as to the fair market value of the securities at the time of the transaction and of any securities traded in connection with the transaction. Additionally, FINRA alleged that OFS didn’t account for the expense involved in effecting the transaction, the fact that the broker is entitled to a profit, and the total dollar amount of the transaction.

FINRA found that this conduct in connection with municipal securities was a violation of MSRB Rules G-17 and G-30. Without admitting or denying the FINRA allegations, OFS agreed to the FINRA sanctions and was fined $40,000 and ordered to pay $18,358.52, plus interest, in restitution to investors.

FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance 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 fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like Oriental Financial Services, which have a duty to supervise employees in order to protect their customers’ interests.

Have you suffered losses in your Oriental Financial Services account due to unfair or unreasonable security recommendations? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Oriental Financial Services stockbrokers who may have engaged in misconduct and caused investors 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 35 years, 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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.