News and Articles

Monthly Archives: March 2019

FINRA Fined Accelerated Capital Group and Ordered it to Pay Restitution to Six Customers

FINRA censured and fined Accelerated Capital Group $400,000 for failing to establish and maintain a supervisory system and written procedures reasonably designed to achieve compliance with applicable laws, regulations and rules.  The investigation found that the Firm’s failures allowed a registered representative to engage in excessive and unsuitable transactions.  The firm’s supervisory failures resulted in harm to vulnerable customers, five of them over the age of 80, and at least seven living on fixed incomes.  These transactions resulted in over $650,000 in commissions.   

The firm’s supervisory system was not reasonably designed to identify unauthorized, excessive, or unsuitable trades effected by representatives in their customers’ accounts.  The system failed to ensure that representatives made customers aware of all commissions, costs and breakpoints associated with mutual fund transactions, specifically ones relating to Class A mutual funds and front-loaded fees.  Additionally, the investigation found that the firm failed to report customer complaints and an internal disciplinary action to FINRA. 

On March 15, 2019, an Office of Hearing Officers decision became final in which Accelerated Capital Group was censured and fined.  It was also ordered to pay $422,029.53, plus interest, in restitution to six customers.

If you have not hired an attorney you may contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL  33324.  By phone: 954.693.7577 or 800.718.1422.

FINRA Fined Corinthian Partners, LLC its Chairman/President and its CCO

On March 18, 2019, FINRA censured and fined Corinthian Partners, LLC, together with the firm’s Chairman/President and CCO, for failure to establish, maintain, and enforce a reasonably designed supervisory system, related to the sale of Non-Traditional ETPs (NT-ETPs) to customers.  According to FINRA’s Regulatory Notice 09-31, NT-ETPs “are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”  Due to NT-ETPs’ inherent risks and the complexity of the products, it is required that firms oversee the transactions and monitor for unsuitability and risks particular to non-traditional ETPs such as the risk incurred by long-term holding of a product that resets daily. 

The investigation revealed that a sole registered representative recommended that his customers invest almost exclusively in NT-EFTPs and hold them for extended periods of time.  The registered representative solicited 1,910 purchases totaling $279 million and 1,663 transactions that amounted to $275 million in sales of NT-ETPs.  These transactions generated approximately $890,000 in commissions, which represented a significant portion of the firm’s revenue.  Despite this activity, the firm lacked a reasonably-designed supervisory system and WSPs to ensure suitability of recommendations, failed to ensure that new account documents were filled out completely and accurately.  Additionally, the firm’s principals admitted that they had joint responsibility for establishing, maintaining and enforcing the firm’s supervisory system and its WSPs, they failed to identify and investigate red flags of unsuitable trading.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a reasonably designed supervisory system.  Corinthian Partners, LLC was censured and fined $30,000, the firm’s principals were also fined and suspended from association with any FINRA member in any capacity for 30 business days. 

If you have not hired an attorney you may contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL  33324.  By phone: 954.693.7577 or 800.718.1422.