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FINRA Disciplinary Proceeding Against RBC Capital Markets, LLC

On April 24, 2013, FINRA announced that it had censured and fined RBC Capital Markets, LLC $97,500.00.

FINRA’s findings state that during a review period of July 1, 2009 through September 30, 2009, RBC failed to use due diligence with transactions in corporate bonds for or with customers to ascertain the best inter-dealer market, and failed to buy or sell in such market so that the resultant price to its customers was as favorable as possible under prevailing market conditions.   The conduct described in this paragraph constitutes distinct violations of FINRA Rule 2010 and NASD Rule 2320.

The Firm also purchased municipal securities for its own account from a customer and/or sold municipal securities for its own account to a customer at an aggregate price (including any markdown or markup) that was not fair and reasonable, taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transactions; the expense involved in effecting the transactions; the fact that the broker, dealer or municipal securities dealer is entitled to a profit; and the total dollar amount of the transactions.  This violates MSRB Rules G-17 and G-30(a).

In addition, FINRA found that RBC failed to provide written notification disclosing to its customers its correct capacity in transactions; failed to disclose details available upon request for compensation, which is stated in a  single amount of customer confirmations; and disclosed on customer confirmations that a commission was charged for order filled in a principal capacity.  As a result, the Firm was not in compliance with SEC Rule 10b-10.

In settling this matter RBC Capital Markets, LLC neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.