Colliers Securities censured and fined for allegedly failing to comply with MSRB disclosure and reporting obligations
The firm failed to utilize the requireds special conditions indicators for transactions in new issue municipal securities reported to the RTRS.
It also failed to disclose or disclose accurately the require mark-up and mark-down information on retail customer confirmations for municipal securities transactions and corporate debt securities transactions.
The firm’s supervisory system was not reasonably designed to achieve compliance with MSRB disclosure and reporting requirements, with an absence of key reviews contributing to the issues identified.
FINRA Rule 2010
FINRA Rule 2232
FINRA Rule 3110
MSRB Rule G-14
MSRB Rule G-15
MSRB Rule G-27
Securities representative suspended and fined for allegedly engaging in an outside business activity without notice or approval
The representative became a trustee in the estate of a deceased firm customer and was compensated for this work.
FINRA Rule 2010
FINRA Rule 3270
Former securities representative suspended and fined for allegedly forwarding funds that may have been related to illegal activity
The representative met someone who asked for him to accept the receipt of funds in his bank account on her behalf following her move overseas.
He received these funds and transferred them overseas despite expressing concerns about the fact that the transactions were illicit.
FINRA determined that the representative was reckless, or at least negligent, in failing to recognize that the funds were likely the result of fraud or other illegal activity.
FINRA Rule 2010
PNC Investments censured and fined for alleged supervisory system failings connected to the surveillance of rates of deferred variable annuity exchanges
Variable annuity exchanges require more comprehensive and targeted protection for investors.
But when supervising the exchanges the firm simply relied on transaction-by-transaction supervisory approvals along with a data-visualization dashboard, not addressed by the firm’s WSPs, that regional supervisors used on an ad-hoc basis to calculate rates of exchange.
The firm did not require supervisors to track or perform any further review of representatives whose rates and conduct were potentially inconsistent with applicable rules and regulations.
The firm also failed to provide supervisory with guidance to help them with the evaluation of the rates and the activities of representatives connected to these.
FINRA Rule 2010
FINRA Rule 2330
FINRA Rule 3110
CCO suspended and fined for allegedly failing to reasonably supervise the surveillance of her firm’s securities transactions and also for failing to implement a reasonably designed AML compliance program
Given the volume of transactions processed by the firm, its trading compliance group, responsible for the review and investigation of surveillance reports, was under-resourced both in terms of number and experience level of staff members.
The absence of escalations from the group should have alerted the CCO to its failure to effectively perform surveillance of the firm’s trading activities.
The firm had also designated the CCO as its AMLCO. During the time that she performed this function the CCO filed to implement a reasonably designed AML compliance program
Despite being aware that FINRA had cautioned the firm about the need to implement automated trade surveillance, the CCO (as AMLCO) did not implement:
- policies and procedures reasonably expected to detect and cause the reporting of suspicious transactions;
- policies and procedures reasonably designed to detect and report activity of correspondent accounts for foreign financial institutions;
- reasonable AML testing;
- reasonable ongoing training for appropriate personnel;
- an AML compliance program that included appropriate risk-based procedures for ongoing customer due diligence.
The CCO will be required to requalify as a principal before acting in this capacity in the future.
This is an interesting fact pattern and has been covered by GRIP in a more detailed article.
FINRA Rule 2010
FINRA Rule 3110
FINRA Rule 3310
Securities principal suspended and fined for allegedly failing to perform key supervisory responsibilities
As the head of his firm’s trading compliance group the principal failed to ensure that his subordinates were conducting the surveillance reviews assigned to them.
He also failed to reasonably investigate red flags that some of the reviews were not being performed.
This case is connected to the AWC above and has been covered by GRIP in a more detailed article.
FINRA Rule 2010
FINRA Rule 3110
| Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them. |
