Shearson Financial Services, LLC (SFS) of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly maintaining inaccurate books and records.
FINRA investigators found between June 10,2013 through October 6,2015, SFS maintained inaccurate books and records reflecting that 1,873 transactions were unsolicited, when in fact, the transactions were solicited, in violation of FINRA Rules 451 1(a), 2010, and Section 17(a) and SEC Rule 17a-3 of the Securities Exchange Act. In addition, during this period, SFS, acting through 15 registered representatives, exercised discretion in 231 transactions in 56 customer accounts, without written authorization from the account holders, in violation of NASD Rule 2510(b) and FINRA Rule 2010.
On June 25, 2012, SFS received a Cautionary Action Letter from FINRA staff warning that it had inaccurately marked 47 order tickets as unsolicited, when in fact, the orders were solicited. Despite the 2012 Cautionary Action, FINRA alleges SFS continued to inaccurately mark orders as unsolicited when the orders were solicited. Specifically, between June 10, 2013 and October 6, 2015, 18 registered representatives and principals of the firm marked order tickets as unsolicited when the orders were solicited for 1,873 transactions in customer accounts. Furthermore, FINRA found SFS, through its registered representatives, exercised discretion in customer accounts without written authorization from those customers in violation of FINRA conduct rules. Without admitting or denying the FINRA allegations, SFS agreed to the sanctions and was ordered to pay a $100,000 fine.
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 Shearson Financial Services, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Shearson Financial Services account due to any broker misconduct? 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 Shearson 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 email@example.com for answers to any of your questions about this blog post and/or any related matter.