With the increase in FINRA enforcement activity in the last year, we hear daily from concerned RAs and other financial industry professionals – this post is intended to decode the basics of the process and offer some cautions to avoid pitfalls awaiting the unwary. 1. How can you become a target of a FINRA investigation?…
Continue reading ›FINRA’s Department of Enforcement recently made public a Letter of Acceptance, Waiver and Consent (AWC) by which former LPL broker Mark Tyler Bonds agreed to a one month suspension and a $5,000 fine to resolve allegations that he borrowed money from a customer of his firm, in violation of FINRA rule 3240. In the AWC,…
Continue reading ›Barclays Capital has reached a $97 million settlement with the Securities and Exchange Commission to resolve allegations that its Wealth and Investment Management Americas (WIMA) unit overcharged clients by $50 million between 2010 and 2015. The SEC’s investigation determined that Barclays Capital, which sold its WIMA unit in 2015, incurred violations of multiple sections of…
Continue reading ›Purshe Kaplan Sterling Investments (PKS) of Albany, New York, recently agreed to pay $3.4 million to a Native American tribe to resolve allegations that one of its brokers, Gopi Krishna Vungarala, took millions of dollars in undisclosed commissions on the tribe’s investments. Vungarala was not only a financial advisor to the tribe; he was also…
Continue reading ›Kevin Richard Graetz, a former broker from New York, recently settled a FINRA complaint relating to his alleged failure to report $1 Million in tax liens over the course of seven years. FINRA requires registered personnel to disclose tax liens and any other unsatisfied judgments in their Form U4. As per FINRA’s settlement documents, in…
Continue reading ›Michael James Malone, a FINRA arbitrator in Detroit, recently denied an expungement request from broker Kathie Lee Foreman. Foreman was seeking expungement of a customer complaint in connection with “unsuitable” investments allegedly leading to the, also alleged, loss of $20,000. Foreman, formerly of Sigma Financial Corp.; had also been accused by Troy William Johnson of…
Continue reading ›Check cashing businesses are a major focus of anti-money laundering rules and regulations. Investors recently learned that federal and New York prosecutors are currently investigating Capital One Financial Corp.’s anti-money laundering program and “certain check casher clients” from the financial institution’s annual report – offering the perfect opportunity to review the regulatory expectations for check…
Continue reading ›Last April, FINRA announced that it had revised the sanction guidelines that apply when there has been a violation of a FINRA rule. Professionals in the industry whose activities are regulated by FINRA need to be aware of the scope and impact of these changes. The Sanction Guidelines do not directly prescribe specific penalties or…
Continue reading ›The SEC is not used to losing a case in-house, but that is precisely what happened on April 18th, when Judge James Grimes dismissed the insider trading allegations against Charles L. Hill of Atlanta. Hill had made a sizable profit by buying shares of Radiant Systems Inc. right before an acquisition by NCR Corp, and…
Continue reading ›A unit of TD Bank, a US subsidiary of Canada’s Toronto-Dominion Bank, has agreed to pay a $125,000 fine to resolve allegations that it failed to record the required review of 3.1 million emails. FINRA requires that all securities-related correspondence between registered representatives and the public receive supervisory review, pursuant to Rule 3010: “Each member…
Continue reading ›
