On Sep. 17, FINRA fined Vanderbilt $100k for undue churning. Vanderbilt Securities, and Barry Alan Champney fined $100k and 5k respectively. Alleged Violations Procedures acknowledged regular trades in the same security may be unsuitable. But did not give guidance for detecting or preventing excess trading or churning. No systemic tracking of turnover rates and cost-to-equity…
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FINRA Fine $1mn VA Suitability
On Sep. 17, FINRA fined four firms $1mn re VA suitability issues. FSC Securities Corporations, fined $200k, Royal Alliance Associates fined $350k. SagePoint Financial, fined $200k and Woodbury Financial Services, fined $250k. Failures Procedures did not specifically address the suitability issues related to different surrender periods, fees and costs of the different variable annuity share…
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FINMA Credit Suisse FIFA Failings
On Sep. 17, FINMA announced Credit Suisse AML failure re FIFA. Announced the conclusion of two investigations into AML failings at Credit Suisse. Overview An investigation identified deficiencies in anti-money laundering due diligence, re suspected corruption involving FIFA, Petrobras, Petróleos de Venezuela (PDVSA). Second re significant business relationship with politically exposed person (PEP). Deficiencies in AML…
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SEC Charge IA for $15mn Fraud
On Sep. 14, SEC charged IA on conflicts that defrauded customers. Steele Financial and Tamara Steele sold $15mn in stock from a private company, Behavioral Recognition Systems (BRS), previously charged with fraud by the SEC. Alleged Violations Shares sold to 120 advisory clients, many of whom are current or former teachers. Steele did not disclose…
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SEC Fine BD on Blue Sheet Data
On Sep. 13, SEC fined B/D $2.75mn for deficient blue sheet data. Convergex Execution Solutions charged for filing incomplete trading information. Alleged Violations Due to coding errors, many submissions were missing data, or had deficiencies. Included customer information, order execution time, transaction type identifier. In 2012-16, 29% of submissions had deficient customer identifying information. Follows…
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SEC Short-and-Distort Scheme
On Sep. 12, SEC charged hedge fund for short-and-distort scheme. Lemelson Capital profited from driving down price of Ligand Pharmaceuticals. Alleged Violations Defendant took a short position in May 2014, on behalf of The Amvona Fund. Gregory Lemelson then issued false information about Ligand so the price fell. Ligand’s stock lost more than one-third of…
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