Former products representative barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 8210
Former securities principal barred for allegedly refusing to appear for on-the-record testimony
FINRA Rule 2010
FINRA Rule 82104
Former securities representative suspended and fined for allegedly making unsuitable recommendations to customers
The representative recommended 10 variable annuity exchanges to nine firm customers without a reasonable basis for believing that such recommendations were suitable. In making the recommendations the representative:
- did not consider or document the rationale for making the recommendations;
- failed to conduct a comparative analysis of the benefits, fees, and costs of the surrendered and replacement variable annuities; and
- incorrectly stated that the replacement variable annuity was lower in terms of customer fees.
Similarly, the representative also did not have a reasonable basis to believe that the recommendations to two customers to purchase variable annuities were suitable based on the customers’ investment profiles. In particular any tax penalties connected with early withdrawals from the annuity were not considered.
In connection with these transactions the representative made negligent representations and omissions of material fact in order to make the transactions appear more favorable than they actually were.
And finally the representative forged a customer signature on an annuity application, photocopying her signatures from her first application without her awareness or consent.
A restitutionary payment of $25,436 plus interest has been ordered.
FINRA Rule 2010
FINRA Rule 2111
FINRA Rule 2330
Interactive Brokers censured and fined for allegedly failing to report statistical and summary information on written customer complaints
The inaccurate reporting took place between 2020 and 2022 and appears to have stemmed from client service representatives failing to report customer complaints connected with its website, on-line systems and customer service.
And while the firm’s procedures defined a customer complaint, they referred to FINRA Rul 4513 rather than Rule 4530.08, which requires that member firms report any written grievance by a customer. The firm’s training materials provided a too narrow definition for the types of complaints that should be reported.
In addition, as a result of human error, the firm also failed to report, in a timely way, regulatory actions, civil litigations and arbitration claims in which it had been named.
Finally, as a result of misunderstanding one of the questions included in Form BD the firm failed to amend this appropriately to disclose 12 actions by foreign financial regulatory authorities finding violations of regulations or statutes by its foreign control affiliates.
FINRA By-Laws Article IV
FINRA Rule 1122
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 4530
FINRA Form BD
Former securities representative barred for allegedly refusing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Securities representative suspended and fined for alleged Reg BI obligation violations
The representative along with another registered representative recommended a level of trading that was excessive and not in the best interest of the customer in question, generating $28,428 in commissions while causing $95,393 in losses.
The other representative had already been suspended for excessively trading customer accounts in November 2024.
A restitutionary payment of $14,214 has been ordered.
FINRA Rule 2010
SEC Reg BI
SEA 1934 Rule 15l-1
Former securities representative barred for allegedly failing to provide documents and information
FINRA Rule 2010
FINRA Rule 8210
Pinnacle Investments censured and fined for alleged Reg BI and other compliance failings
The Reg BI failings are connected to the failure by the firm to establish, maintain and enforce a reasonably designed supervisory system related to NT-ETPs – complex financial instruments designed to return a multiple or an opposite (or both) of the daily performance of an underlying index or benchmark.
The firm required registered representative to sign an attestation indicating that they understood NT-ETPs and their unique features and risk including the risks of holding them for more than a single trading session. But the firm did not ensure that the representatives actually considered the intended holding periods before making recommendations.
The firm’s WSPs required a supervising principal to review everyone recommending NT-ETP transaction, but did not address holding periods and how these should be valuated when considering the customer’s best interests. The supervisory review was limited to ensuring that registered representatives who had signed the requisite attestation when recommending the purchase.
As a result the firm failed to recognize that a registered representative was recommending the purchase and holding of NT-ETPS to customers for durations not in their best interest.
In addition the firm’s supervisory system was not reasonably designed to monitor for discretionary and/or unauthorized trading in customer accounts. The firm thus failed to detect at least one of its registered representatives pattern of same-day, same-security trades in the accounts of multiple unrelated customers and did not ascertain if appropriate authorizations had been obtained in connection with this trading.
Finally the firm failed to conduct timely inspections of six branch offices and one OSJ.
FINRA Rule 2010
FINRA Rule 3110
FINRA Reg Notice 12-03
FINRA Reg Notice 09-31
Securities representative suspended and fined for allegedly failing to update Form U4 with a felony charge
FINRA Rule 1122
FINRA Rule 2010
FINRA By-Law Article V Section 2
FINRA Form U4
Securities principal charged with failing to produce documents and information requested
This is a complaint and not an AWC.
FINRA Rule 2010 FINRA Rule 8210
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
