FINRA fined Lenox Financial Services $15,000 for failure to disclosed required financial interest and beneficial ownership in several Research Reports prepared by the firm’s principal.  Additionally, Lenox failed to prevent its principal from making at least eight purchases in research analysts’ accounts of securities of companies that were the subject of his research reports.  FINRA found that the firm failed to establish a supervisory system reasonably designed to achieve compliance with disclosures requirements and personal trading restrictions.  

The investigation found that between September 28, 2012 and November 23, 2015, Lenox published 79 research reports prepared by its principal, regarding the equities of 14 companies.  In 14 of the initial research reports, Lenox included a generic disclaimer that used vague language that failed to identify its principal’s actual financial interest or the nature of his actual financial interest in the subject companies. 

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to make required financial interest and beneficial ownership disclosures in its research reports, as well as establish a supervisory system reasonably designed to achieve compliance with personal trading restrictions. 

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