Acting through Ayre, its CCO, Ayre Investments failed to establish and maintain a supervisory system and establish, maintain and enforce WSPs to supervise the activities of each registered person that were reasonably designed to achieve compliance with the applicable rules and regulations related to
The Firm's WSPs were purchased from a third-party vendor and were intended to meet the needs of any broker-dealer, regardless of the firm’s size or business. Acting through Ayre, the Firm failed to tailor the template WSPs to address the firm’s particular business activities. With respect to the areas identified above, the firm’s WSPs failed to describe with reasonable specificity the identity of the person who would perform the relevant supervisory reviews and how and when those reviews would be conducted; and with respect to the maintenance of electronic communications, the firm completely failed to establish, maintain and enforce any supervisory system and/or WSPs reasonably designed to ensure that all business-related emails were retained.
Acting through Ayre, the Firm violated the terms of a Letter of Acceptance, Waiver and Consent (AWC) by failing to file a required written certification with FINRA regarding the firm’s WSPs within 90 days of the issuance of the AWC. Despite being given multiple reminders and opportunities by FINRA staff during a routine examination to file the certification, the firm and Ayre have yet to file the certification the AWC required.
The Firm only had one registered options principal (ROP) who was required to review and approve all of the firm’s option trades; for more than half a year, however, the ROP resided in another state and did not work in the firm’s main office. Furthermore, the firm’s WSPs did not address or explain how the ROP, given his remote location, was to accomplish and document the contemporaneous review and approval of all options trades firm customers placed; the firm executed approximately 450 options transactions, none of which the ROP approved.
The firm failed to maintain and preserve all of its business-related electronic communications, and therefore willfully violated Securities Exchange Act Rule 17a-4.
The Firm permitted its registered representatives to use email to conduct business when the firm did not have a system for email surveillance or archiving. Each firm representative maintained electronic communications on his or her personal computer or arranged for the retention of electronic communications in some other fashion, and the firm relied on representatives to forward or copy their businessrelated emails to the firm’s home office for retention. Not all of the representatives’ business-related emails were forwarded to the home office, and the firm did not retain the electronic communications that were not forwarded or copied to the firm’s home office; as a result, the firm failed to maintain and preserve at least 10,000 business-related electronic communications representatives sent to or received.
Ayre Investments, Inc.: Censured; Fined $10,000 (note: FINRA states that it imposed a lower fine against the firm after it considered, among other things, the firm’s revenues and financial resources); Undertakes to review its supervisory systems and WSPs for compliance with FINRA rules and federal securities laws and regulations, including those laws, regulations and rules concerning the preservation of electronic mail communications, and certify in writing to FINRA, within 90 days, that the firm has in place systems and procedures to achieve compliance with those rules, laws and regulations.
Timothy Tilton Ayre: Fined $10,000; Suspended 2 months in Principal capacity only.