Monthly Archives: May 2024

May 30, 2024 – An AWC was issued in which Burke was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Burke consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with its investigation into the circumstances giving rise to a Form U5 filed by his member firm. The findings stated that the Form U5 disclosed that Burke had been discharged after an affiliate property/casualty company terminated his contract for applying electronic and wet signatures on several property/casualty insurance forms without the consent or knowledge of the insured. (FINRA Case #2023080266701)

Harmed investors can call (954) 693-7577 or email [email protected] to discuss their legal options. All consultations are free and confidential.   Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

May 28, 2024 – An AWC was issued in which the firm was censured, fined $325,000, and required to certify that it has remediated the issues identified in the AWC and implemented a reasonably designed supervisory system, including WSPs. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a supervisory system reasonably designed to detect possible instances of signature forgery or falsification. The findings stated that firm registered representatives electronically signed customer names on documents, including documents that were required books and records of the firm. The firm’s WSPs required representatives to obtain authentic customer signatures on firm documents. However, the firm’s WSPs did not include any procedure to supervise use of electronic signatures or provide reasonable guidance to supervisors on what they should look for in attempting to assess whether an electronic signature was genuine. As a result, the firm did not reasonably investigate certain red flags contained in the certificates of completion, such as instances where representatives sent a document from their work email address to an email address not recorded in the customer’s account information such as their personal email address, sent an authentication code to their own cell phone number, or instances where the representative and customer’s remote signatures were sent from the same IP address. The firm failed to detect that certain of its representatives sent documents requiring a customer’s electronic signature to their own personal and work email addresses, and corresponding authorization codes to their own phones, and then falsified or forged customer electronic signatures on firm documents. The falsifications and forgeries were not in furtherance of unauthorized activity, there was no customer harm, and no customer complained.  (FINRA Case #2023079075201)

Harmed investors can call (954) 693-7577 or email [email protected] to discuss their legal options. All consultations are free and confidential.   Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

May 10, 2024 – An AWC was issued in which Bray was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Bray consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with its investigation into a disclosure reflected in a Form U4 amendment filed by his member firm reporting that he was charged with a felony. (FINRA Case #2023080242101)

Harmed investors can call (954) 693-7577 or email [email protected] to discuss their legal options. All consultations are free and confidential.   Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

May 9, 2024 – An AWC was issued in which the firm was censured, fined $825,000, and required to certify that it has remediated the issues identified in the AWC and implemented a reasonably designed supervisory system, including WSPs. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to reasonably supervise the execution timeliness of customer orders. The findings stated that the firm’s supervisory system, including its WSPs, was not reasonably designed in so far as the firm only reviewed the execution timeliness of orders processed through the firm’s electronic order systems from the time the orders were routed to a market center for further handling or execution and the final execution time. The firm did not conduct a supervisory review of how long it took the firm’s electronic order systems to process and route the orders to a market center. By omitting the electronic order systems’ order handling time from order receipt to the route time to a market center from its supervisory reviews, the firm failed to reasonably supervise whether it made every effort to execute marketable customer orders that it received fully and promptly. The findings also stated that the firm failed to reasonably supervise the accuracy of memoranda for electronic orders. The firm’s supervisory system, including its WSPs, was not reasonably designed to achieve compliance with SEC and FINRA recordkeeping requirements in so far as the firm did not conduct supervisory reviews to ensure the accuracy of information recorded on its order memoranda for retail brokerage equity orders the firm received electronically. (FINRA Case #2017054488401)

Harmed investors can call (954) 693-7577 or email [email protected] to discuss their legal options. All consultations are free and confidential.   Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

May 7, 2024 – An AWC was issued in which the firm was censured and fined $500,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to reasonably supervise transactions that its registered representatives placed directly with product sponsors on behalf of firm customers (i.e., direct business transactions or held away securities transactions). The findings stated that the firm did not take steps reasonably designed to ensure that direct business transactions appeared on 5 Disciplinary and Other FINRA Actions July 2024 the firm’s daily trade blotter, causing the firm to fail to run transactions, including dividend reinvestments, for customers through exception reports used to identify potential sales practice violations, including potentially unsuitable transactions. The firm also failed to ensure that it collected information for customers’ investment profiles, such as the customers’ ages, investment time horizons, and liquidity needs, that was relevant for making certain suitability determinations. Subsequently, the firm revised its WSPs to prohibit direct transactions with mutual fund companies unless a corresponding account has been established at the firm. The firm also instituted procedures to verify that each direct business mutual fund transaction is housed in a firm account or, if not, to require representatives to promptly obtain a new account application and open an account for the customer. The firm also established progressive discipline measures if representatives failed to obtain new account applications. Ultimately, the firm began a retrospective review of its direct business transactions during the relevant period. That review involved identifying the direct business transactions that the firm failed to include on its trade blotter and reviewing the transactions according to the parameters used by the firm’s exception reporting system. The firm attempted to collect missing information about customers’ investment profiles. The suitability of certain of the transactions could not be determined because the firm was unable to collect complete information at the time of the retrospective review about customers’ investment profiles, including their investment time horizons or liquidity needs that would have been relevant at the time of the purchase. (FINRA Case #2017052438501).

Harmed investors can call (954) 693-7577 or email [email protected] to discuss their legal options. All consultations are free and confidential.   Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.