Failure to Supervise - Page 3 of 46 - Law Offices of Robert Wayne Pearce

459 search results found for “Failure to Supervise”

Aug 7, 2017

WFG Investments Fined by FINRA for Failure to Supervise Unsuitable Trading

WFG Investments, Inc. has submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which it has been fined $150,000 by the Financial Industry Regulatory Authority (FINRA) for failing to supervise its registered representative’s unsuitable trading despite numerous red flags. WFG Investments is headquartered in Dallas, Texas and currently has approximately 237 registered representatives and 118 branch offices. FINRA found that WFG Investments failed to appropriately supervise the sales practices of a registered representative who had engaged in unsuitable trading in his customers’ accounts by overconcentrating them in low-priced securities. For example, FINRA found that during 2012, the WFG representative’s account purchases were 66% low-priced securities. In 2013, FINRA’s findings state that the account purchases were 80% concentrated in these securities and/or illiquid and highly speculative private placement and REIT investments.

Jul 14, 2017

FSC Securities Fined by FINRA for Failure to Supervise Third-Party Check Requests

FSC Securities Corporation has been fined $200,000 by the Financial Industry Regulatory Authority (FINRA) for failing to supervise third-party check requests in connection with an employee’s fraudulent investment fund memberships, which ultimately caused the investors to suffer significant losses. According to FINRA, FSC Securities failed to establish, maintain and enforce an appropriate supervisory system to review third-party check requests related to 15 customers’ accounts. These customers were sold memberships in an unapproved fund (the PFG Fund) by a registered representative of the firm who submitted 23 Letters of Authorization (LOAs), authorizing the issuance of approximately $1.6 million in third-party checks from FSC Securities accounts to a bank account controlled by the ill-fated fund. The PFG fund ultimately collapsed and lost millions of dollars due to speculative trading and other investments.

Oct 3, 2016

First Financial Equity and CCO Named in FINRA Complaint for Failure to Supervise Violations

Scottsdale, Arizona-based First Financial Equity Corporation (First Financial) and the firm’s Chief Compliance Officer (CCO), Melissa Ann Strouse, were named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that the firm failed to establish and maintain a proper supervisory system with respect to the appropriateness of fee-based accounts and the monitoring of accounts for potential churning and excessive trading. Melissa Strouse was named in FINRA’s complaint amidst allegations that as the firm’s CCO, she was responsible for ensuring the firm’s compliance with supervisory procedures. According to the FINRA complaint, First Financial Equity had inadequate written supervisory procedures (WSPs) with respect to the appropriateness of fee-based accounts for the firm’s customers and had no system in place to address situations where excessive fees may have been charged. Further, the Complaint alleges that First Financial failed to maintain and enforce a supervisory system related to its options business and that the firm allegedly had no WSPs for the supervision, approval and sale of exchange-traded funds (ETFs). For her part, the Complaint alleges that Melissa Strouse failed to ensure that the WSPs covered all required areas and were amended as needed.

Jun 13, 2016

FINRA Hits Oppenheimer with a $2.9 Million Fine for Failure to Supervise ETF Sales

Oppenheimer & Co., Inc. (Oppenheimer) has been hit with a fine of $2.25 million and ordered to pay restitution to affected customers of over $716,000 for failing to supervise the unsuitable sales of leveraged, inverse and inverse-leveraged exchange-traded funds (non-traditional ETFs). According to FINRA, Oppenheimer failed to enforce its own policies with respect to the solicitation and recommendation of ETFs by its registered representatives. Although Oppenheimer put ETF-related policies in place in 2009 (in response to FINRA Regulatory Notice 09-31), its representatives continued to solicit customers and to execute non-traditional ETF transactions despite the customers not meeting Oppenheimer’s criteria for suitability, e.g. having liquid assets of more than $500,000. FINRA’s findings state that Oppenheimer representatives carried out more than 30,000 ETF transactions, totaling approximately $1.7 billion during the relevant time period.

Dec 1, 2015

Cabot Lodge Securities Registered Principal Suspended for Failure to Supervise

Paul Reid Richardson, of Temple Terrace, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) in which he was suspended for 60 days for failing to supervise wire-transfer activity in customer accounts. Paul Richardson, a former registered principal with the Tampa, Florida branch of Cabot Lodge Securities LLC (Cabot), consented to, without admitting or denying, the sanctions and FINRA’s findings that he approved third-party wire transfers totaling nearly $89,000 from two customer accounts, which were later found to have been made by an imposter. By authorizing the wire-transfers, Mr. Richardson allegedly failed to properly review the distribution requests for funds. According to FINRA, Mr. Richardson relied on the representations of a firm broker as opposed to verbally confirming the wire instructions with the customers.

May 8, 2015

LPL Financial Hit with $11.7 Million Fine for Failure to Supervise Investment Sales

LPL Financial LLC (LPL Financial) was fined $11.7 million by the Financial Industry Regulatory Authority (FINRA) for failing to maintain a proper supervisory system with respect to the sales of complex investment products, such as exchange-traded funds (ETFs), variable annuities, mutual funds, and non-traded real estate investment trusts. Without admitting or denying the findings, LPL Financial consented to FINRA’s sanctions and findings that if failed to enforce its supervisory procedures for the sales of non-traditional ETFs, such as leveraged, inverse, and inverse-leveraged ETFs. Specifically, FINRA found that LPL Financial failed to enforce allocation limits with respect to customers’ investment objectives in its sales of non-traditional ETFs. LPL also failed to ensure that some of its registered representatives were adequately trained to sell the ETFs.

Mar 2, 2015

Citigroup Hit With $3 Million Fine for Failure to Supervise ETF Sales

Citigroup Global Markets Inc., (Citigroup) submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but it did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to deliver prospectuses with respect to the sales of exchange-traded funds (ETFs) to its investor customers. According to FINRA, Citigroup failed to deliver prospectuses for nearly 255,000 investor purchases of approximately 160 ETFs over a three-month period. Further, FINRA found that from 2009 through April 2011, Citigroup may have failed to deliver prospectuses for more than 1.5 million purchases of ETFs by investors. Moreover, Citigroup’s supervisory system failed to achieve compliance with Federal securities laws with regard to prospectus-delivery requirements, especially since the firm allegedly detected certain failures back in 2009.

Feb 18, 2015

Popular Securities Fined By FINRA for Failure to Supervise Puerto Rico Bond Fund Investments

Popular Securities, Inc. n/k/a Popular Securities, LLC, was fined $125,000 by the Financial Industry Regulatory Authority (FINRA) for failure to supervise violations involving over-concentration of investments in Puerto Rico municipal bonds and closed-end bond funds in many of its customers’ accounts. Without admitting or denying the findings, Popular consented to the sanctions and to FINRA’s findings that between July 1, 2011 and June 30, 2013, it failed to supervise its customers’ Puerto Rico bond fund investments, even after the bond rating had been downgraded to junk bond status. Following the junk bond downgrade, FINRA found that Popular Securities’ customers continued to purchase concentrated positions of the Puerto Rico securities.

Dec 5, 2014

Parkland Securities Fined $100,000 By FINRA for Numerous Failure to Supervise Violations

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.

Jul 8, 2014

Salomon Whitney Fined By FINRA For Failure To Supervise ETF Sales

Salomon Whitney LLC of Farmingdale, New York 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 failed to establish a supervisory system with regard to the sale of non-traditional exchange-traded funds (ETFs), including leveraged, inverse and inverse-leveraged ETFs. FINRA’s findings stated that despite the risks involved with holding non-traditional ETFs for longer time periods, numerous Moloney Securities customers held the ETFs for extended periods. Some even allegedly held the ETFs for several months. FINRA found that Moloney Securities failed to adequately train its registered representatives and supervisors with respect to the features, characteristics, and the risks involved with non-traditional ETFs, especially the risks associated with longer-term holds of the ETFs. According to FINRA, Salomon Whitney made unsuitable ETF recommendations and failed to conduct an adequate suitability analysis of the non-traditional ETFs before offering them to its customers. Consequently, Salomon Whitney was censured and fined $30,000.

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459 search results found for “Failure to Supervise”