Dawson James Securities, Inc. (Dawson James) of Boca Raton, Florida consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it’s written supervisory procedures (WSPs) did not meet the minimum requirements in several areas, resulting in a $75,000 fine by FINRA.
According to FINRA, Dawson James’ WSPs failed in such areas as disclosure of conflicts of interest to customers, sales practices, including unauthorized and excessive trading, suitability, over-concentration of securities in customer accounts, and the review of registered representatives’ electronic communications. FINRA’s findings stated that Dawson James neglected to investigate numerous red flags with regard to the activities of a registered representative. Additionally, Dawson James failed in its enforcement of its WSPs, which specifies that electronic correspondence, both incoming and outgoing, would be reviewed daily. FINRA also found that the firm failed to supervise its head trader who, in turn, failed his own supervisory responsibilities with regard to proprietary trading, trade reporting, short sale compliance, mark ups and mark downs, compliance with the Manning Rule and inventory guidelines.
Consequently, Dawson James was censured and fined $75,000 by FINRA.
Broker-dealers must establish and implement a reasonable supervisory system and WSPs to protect customers from the risks associated with investing. In order to protect customers from broker misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor its 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 losses stemming from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s inadequate supervision can bring forth claims to recover damages against firms like Dawson James Securities, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Dawson James account due to its alleged inadequate supervision? 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 Dawson James Securities stockbrokers who may have engaged in misconduct and caused investment 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 firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.