Robert Nash of Deltona Beach, Florida and Merrimac Corporate Securities, Inc., (Merrimac) of Altamonte Springs, Florida have been fined and suspended by the Financial Industry Regulatory Authority (FINRA) Department of Enforcement for failing to establish and maintain a reasonable supervisory system and for falsifying Deposit Securities Request Forms (DSR Forms). Merrimac was a general securities broker-dealer that first became registered as a FINRA member in 1993, where Nash served as the Chief Compliance Officer (CCO).
While Merrimac was under investigation by FINRA, it was determined that Merrimac, through Nash, provided false documents to FINRA and that “Merrimac and certain of its employees violated federal securities regulations and FINRA rules relating to a variety of topics.” Over the course of the investigation, Merrimac provided 37 falsified documents to FINRA. Nash, CCO of Merrimac, acknowledged that he was responsible for the information in the documents.
FINRA found that two other Merrimac Securities registered representatives committed fraud by inflating valuations of illiquid investments and misrepresented or omitted material facts with relation to two client investments. Additionally, FINRA found that the Chief Executive Officer (CEO) of Merrimac provided misleading securities-related communications to the public with regard to two websites he created. The FINRA investigation alleges that representatives of Merrimac sold unregistered securities and that while Merrimac was temporarily suspended in 2009, it engaged in securities transactions. FINRA concluded by alleging that Merrimac and Nash failed to enforce and implement a proper supervisory system and in turn violated Section 5 of the Securities Act of 1993 as well as FINRA Rules 2010 and 8210.
The Panel found Nash and Merrimac Securities liable for the violations alleged. Merrimac Corporate Securities, Inc. was fined $225,000 and suspended from membership with FINRA for 30 days. Robert Nash was fined $50,000, suspended from associating with any FINRA member in any principal capacity for one year and required to requalify as a principal before acting in one any capacity.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers like Merrimac Corporate Securities to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm’s own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like Merrimac Corporate Securities, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Merrimac investment account due to your stockbroker’s 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 stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
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 40 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 post a comment, call (800) 732-2889, send Mr. Pearce an email at email@example.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.