Northern Trust censured and fined for alleged TRACE reporting shortcomings
The firm failed to include commission information when reporting some of its transactions in TRACE-eligible securities. The incomplete reporting was the result of “delays associated with the firm’s manual calculation of commissions.”
During periods of large transaction volume, the firm was unable to calculate all of its commissions within 15 minutes of execution and made a decision not to report these.
The firm failed to address these delays when performing supervisory reviews of its TRACE reporting and so did not have in place a system reasonably designed to ensure compliance with its TRACE reporting obligations.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 6730
TRACE
Former securities representative suspended and fined for alleged unauthorized transactions in a customer’s account
The representative effected a fund transfer based on instructions from a customer who was incapacitated as a result of advanced dementia and so no longer had the capacity or authority to give transaction or transfer instructions.
FINRA Rule 2010
Mariner Investment Group censured and fined for alleged Reg BI failings
The firm failed to establish, maintain and enforce a supervisory system that would ensure compliance with Reg BI requirements. The firm’s WSPs contained “no provisions relating to Reg BI until at least May 2023, and even then, discussed Reg BI only in general terms.”
The firm’s WSPS did not address the firm’s Reg BI obligations nor did they describe how the firm’s personnel should implement, comply with, and supervise these.
A restitutionary payment of $26,864.84 plus interest has been ordered.
FINRA Rule 2010
FINRA Rule 3110
SEC Reg BI
SEA 1934 Rule 15l-1
Former securities representative barred for allegedly failing to provide information and documents
FINRA Rule 2010
FINRA Rule 8210
National Financial Services censured and fined for alleged unit investment trust transfer failings
The firm failed to timely transfer:
- 5,600 UITs through ACATS; and
- 4,000 UITs in kind.
A coding error resulted in the firm’s system blocking transfers of all UITs with a pending redemption, regardless of their redemption dates.
This resulted in delays in UIT transfers with these taking place, on average, 19 business days following the validation of transfer instructions.
The delays meant that many of the UITs had reached their redemption dates by the time of the transfer, which led the firm to transfer redemption proceeds rather than transferring the UITs in kind as per customer instructions.
In addition the firm did not have in place a supervisory system reasonably designed to ensure the timely transfer of UITs via ACATS.
The firm has agreed to an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 11870
Former products representative barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
Former securities representative barred for allegedly refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Tigress Financial Partners censured and fined for alleged AML program failings
The firm’s AML program did not include policies and procedures that would ensure the detection and reporting of suspicious transactions. This despite the fact that customers from high-risk jurisdictions accounted for over two-third’s of the firm’s business by volume and the majority of the firm’s revenue.
The firm’s WSP’s identified a number of red flags that would signal potentially suspicious activity, but did not include reasonable guidance on how such red flags should be detected, reviewed, investigated or documented.
Despite identifying it as a deficiency during annual independent testing of its AML program, the firm failed to put in place appropriate risk-based procedures for the conducting of appropriate ongoing customer due-diligence.
These shortcomings resulted in the firm failing to detect red flags suggesting suspicious transaction taking place.
In addition to the AML program failings the firm did not disclose mark-ups and mark-downs on some of its non-institutional customer confirmations.
FINRA Rule 2010
FINRA Rule 2232
FINRA Rule 3110
FINRA Rule 3310
FINRA Rule 4511
FINRA Reg Notice 19-18
NASD NTM 02-21
Former securities representative suspended and fined for allegedly using WeChat to communicate with firm customers
The firm prohibited the use of WeChat in connection with its securities business and the messages sent and received by the representative were not captured and maintained as a result of this unauthorized communication channel being used.
FINRA Rule 2010
FINRA Rule 4511
NewEdge Securities censured and fined for alleged MSRB rule failings
The shortcomings at the firm connected with MSRB rules included:
- submitting orders for new issue municipal bonds without disclosing that the orders were for its dealer account;
- failing to report dealer municipal bond transactions to the RTRS;
- failing to establish, maintain and enforce a supervisory system reasonably designed to ensure compliance with MSRB rules; and
- failing to reasonably respond to red flags indicating it was obtaining improper allocations of new issue municipal bonds.
Finally, the firm failed to preserve or perform any supervisory reviews of approximately 30,000 Bloomberg instant messages sent or received by its representatives. The omission went unnoticed for eight years and was only discovered when FINRA requested the messages.
A disgorgement of $750,746 plus interest has been ordered.
MSRB Rule G-9
MSRB Rule G-11
MSRB Rule G-14
MSRB Rule G-17
MSRB Rule G-27
Former securities representative suspended for allegedly making material misrepresentations and omissions in connection with the marketing of private placement offerings
The representative also made “reckless misrepresentations of material facts and omitted material information” when applying for and receiving Pandemic Unemployment Assistance (PUA).
FINRA Rule 2010
SA 1933 Rule 17
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
