Former securities representative suspended and fined for allegedly falsifying customer signatures
Seven electronic signatures were appended to documents, two without the prior permission of the customers.
All the transactions were authorized and no customers complained.
FINRA Rule 2010
FINRA Rule 4511
Former securities representative suspended and fined for allegedly exercising discretion without prior written authorization
The customers knew that the trades were being placed on their accounts, but no written authorization for this had been obtained.
FINRA Rule 2010
FINRA Rule 3260
Former securities representative suspended and fined for allegedly participating in an outside business activity without notice or authorization
The representative also participated in private securities transactions, corresponding with prospective investors and signing subscription agreements and regulatory filings concerning the offering in question.
The offering raised more than $11m from approximately 15 investors, some of whom were firm customers. No commissions were earned for this work by the representative.
FINRA Rule 2010
FINRA Rule 3270
FINRA Rule 3280
Former securities representative barred for allegedly refusing to provide information
FINRA Rule 2010
FINRA Rule 8210
Joseph Stone Capital censured and fined for alleged failures connected to the recording of customer calls
The firm’s written procedures, and their implementation and enforcement, was deficient as it did not provide a specified time period by which supervisory reviews of the recorded telephone conversations were to be completed, nor did it provide guidance on actions to be taken if concerns about sales practices had been identified during such reviews.
Registered representatives at the firm were permitted to use their own cell phones to conduct business. In order to do so the representatives were required to download an application that allowed for the recording of conversations with customers.
However, it was the representatives who were responsible for ensuring that the application was actually used and there was no reasonably designed supervisory process that would help the firm determine if all required calls were actually being recorded by utilizing the app.
In addition, as a result of human error and some technical difficulties, the firm failed to record any of the customer calls for six of its registered representatives.
Finally the firm’s carrier only retained calls for a period of one year. And because the firm did not have in place reasonable guidance on the calls being downloaded prior to deletion by the carrier it failed to retain all of the call recordings for the required three-year period.
FINRA Rule 2010
FINRA Rule 3170
FINRA Taping Rule
Former securities representative barred for allegedly sharing in customer profits
The representative provided a customer with new issue allocations in exchange for a portion of the customer’s realized profits when the stock was sold. No written authorization from the customer was obtained and the profit-sharing agreement was not disclosed to the firm.
The customer paid more than $120,000 to the representative through artificially inflated commissions on unrelated transactions in exchange for more than 100 allocations.
The representative exchanged hundreds of text messages related to the firm’s business on his personal phone. These exchanges were not captured or maintained by the firm as a result.
FINRA Rule 2010
FINRA Rule 4511
MD Global Partners censured and fined for alleged Reg BI shortcomings
Between June 2020 and December 2022 the firm failed to establish, maintain and enforce written policies and procedures reasonably designed to ensure compliance with Reg BI.
In addition the firm failed to file the required documents for 16 private placement offerings in a timely fashion and failed to complete its annual certification of its compliance and supervisory processes between 2019 and 2023.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 5123
FINRA Rule 3130
SEA 1934 Rule 15l-1
SEC Reg BI
Former securities representative suspended and fined for allegedly engaging in an undisclosed business activity
The representative registered his own investment advisory firm prior to joining his new employer. He continued his involvement with this business despite his employer firm denying his request to participate in this type of outside business activity.
After moving firms he continued with this outside business activity without notifying or obtaining approval from the new employer. In both instances the representative falsely certified that he was not involved in any outside business activities.
In addition the representative participated in a private securities transaction without providing prior notice or obtaining approval from his employer.
And finally the representative opened and maintained outside brokerage accounts without disclosing these to either one of his employers between 2019 and 2023.
FINRA Rule 2010
FINRA Rule 3210
FINRA Rule 3270
FINRA Rule 3280
Securities representative barred for allegedly refusing to provide information and documents
FINRA Rule 2010
FINRA Rule 8210
Former company products principal suspended and fined for allegedly impersonating a firm customer
After making a recommendation that the customer accepted the representative made four phone calls to an annuity provider, identifying himself as the customer in order to facilitate the transaction.
The representative also exercised discretion in a customer account and attempted to conceal this by using a personal email to discuss the transaction with the customers affected.
Finally, despite attestations to the contrary, the representative used two personal accounts to conduct firm securities business, which meant that the communications were not captured or preserved by the firm.
FINRA Rule 2010
FINRA Rule 3260
FINRA Rule 4511
Sonenshine & Company censured and fined for alleged AML program shortcomings
The firm failed to develop and implement a reasonable AML program.
Despite a warning from FinCEN it failed to establish and implement policies, procedures and guidance that would enable it to respond to FinCEN requests in a timely manner.
Finally the firm did not complete the required annual independent testing of its AML compliance.
The firm has agreed to an undertaking requiring it to certify in writing the remediation of the issues identified.
FINRA Rule 2010
FINRA Rule 3310
Former securities representative barred for allegedly accepting loans from customers
The representative borrowed money from two customers despite the firm’s prohibition of this practice. Neither one of the loans have been repaid.
The money that was borrowed was not utilized for the authorized purpose, which meant that the funds were, in effect, improperly used.
Finally the representative failed to disclose the outside business activity in question.
FINRA Rule 2010
FINRA Rule 2150
FINRA Rule 3240
FINRA Rule 3270
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
