McLean recommended to a customer that he transfer his existing mutual funds to McLean’s member firm, and told the customer that, if he became dissatisfied, he could liquidate the account at no expense.  Shortly thereafter, the customer accepted McLean’s recommendation and transferred the mutual funds. 

Thereafter, the customer had suffered losses in those mutual fund investments and wanted to liquidate his holdings. Accordingly, McLean reimbursed the customer $252 for the charges he incurred in selling the mutual funds, thereby improperly sharing in the customer’s losses. The firm’s written procedures expressly prohibited registered representatives from sharing in any benefits or losses with clients resulting from securities transactions.

Swank's customer purchased $935,465.50 of an agency bond with Swank at a member firm, and approximately one week later, Swank received a complaint from the customer stating that he misunderstood the bond purchase. Swank sold the position for $933,595.14 and at the same time, the customer demanded $1,850 in realized losses on the transaction and $3,300 accrued interest. 

In lieu of the customer making a formal complaint to Swank’s firm, the customer and Swank entered into a verbal settlement agreement and Swank paid the customer approximately $5,150 in cash., which Swank failed to advise his firm, orally or in writing, about the customer’s complaint, the settlement or the $5,150 payment.

Head conveyed false and exaggerated account values to customers verbally and with falsified documents; and borrowed $20,000 from a customer and has repaid only $1,000 to the customer, contrary to the firm’s written procedures prohibiting representatives from borrowing from customers without branch manager or other supervisor approval and the written approval of the firm’s compliance department. Head did not request or obtain permission from her firm to borrow money from the firm’s customer.

Head settled and/or offered to settle a customer complaint without her firm’s knowledge or authorization. Head sent an unapproved and materially false letter to a bank by preparing, signing and mailing a letter to a bank stating that a customer’s assets totaled over $4 million in order to assist the customer in obtaining a mortgage loan; although the firm’s procedures required that outgoing correspondence be reviewed and approved before mailing. Head neither sought nor obtained approval for the letter.

Head exercised discretion in customer accounts without written authorization; Head neither sought nor obtained authorization from customers or her firm to exercise discretion in their accounts.

Head mischaracterized solicited trades in customers’ accounts as unsolicited, causing her firm’s books and records to be inaccurate. In addition,

Head repeatedly sent emails and text messages to customers from her personal email accounts, which violated her firm’s policies forbidding the use of personal email accounts and mandating that business-related electronic communications with customers occur within the firm’s network.  Head’s use of her personal email account prevented the firm from reviewing her email and text messages, and delayed the discovery of her misconduct in customers’ accounts.

Head submitted false and evasive information to FINRA in response to a written request for information; and subsequentlyfailed to appear or otherwise respond to FINRA requests for testimony.

O’Lear failed to execute a customer’s sale of preferred stocks in her account as instructed, when the customer complained to his member firm, he provided her with a $6,866 check to settle her losses. The customer deposited O’Lear’s check but it was declined for insufficient funds. Next, O’Lear wrote a second check for $6,900, including the non-sufficient fund (NSF) charges, which the customer deposited and the check cleared.

O’Lear made this payment to the customer without his firm’s knowledge or authorization.

Ameriprise failed to establish, maintain and enforce a supervisory system reasonably designed to detect and prevent one of its broker’s misconduct. The broker who was registered with the firm forged customers’ signatures on various financial documents that he submitted to the firm for processing. The broker agreed to pay certain fees for customers without alerting the firm in order to avoid complaints from these customers. The broker agreed to a Bar.

An Ameriprise surveillance analyst became aware of potential forgeries by the broker and failed to follow up with a timely investigation, and the firm’s supervisory system did not ensure that a timely investigation was conducted.

The firm had implemented a new set of procedures for its surveillance department through which the firm discovered that the investigation of the broker had not been completed, and the firm promptly reassigned the matter to other surveillance personnel.  The firm completed its investigation of the broker nearly two and a half years after it first opened the investigation and found ample evidence of repeated forgeries by the broker, whose employment was then terminated.

In connection with the sale of investments in a film production company, Flowers made fraudulent misrepresentations and omitted to disclose material information. Flowers collected at least $92,000 from investors, falsely representing that he would use their funds to finance a film production business and promising exorbitant, guaranteed returns. Instead of investing the funds, Flowers misused $30,498 to repay other investors and pay for personal expenses without the investors’ knowledge, consent or authorization.

Flowers made recommendations to a customer to invest in private placement offerings that were unsuitable in light of the customer’s financial situation, investment objective and financial needs.

Flowers attempted to settle away customers’ complaints without his member firm’s knowledge or consent.

Flowers signed an attestation form for a firm acknowledging that email communications with the public must be sent through the firm’s email address and copied to the compliance department, but Flowers communicated with customers via unapproved, outside email accounts without his member firms’ knowledge or consent, and as a result of his outside communications, his member firms were unable to review his emails to firm customers. In addition, Flowers engaged in private securities transactions without providing prior written notice to, and receiving prior written approval from, his member firms.

In connection with customers’ purchases of a private placement offering, DiMaggio falsely represented to each of the customers that she had personally invested funds with the issuer. Based on DiMaggio’s representation and recommendation, each of the customers invested $60,000 in the offering.

DiMaggio settled and/or attempted to settle potential customer complaints regarding undisclosed fees, failing to add a living benefit rider to a variable annuity and making unsuitable investment recommendations, without her member firm’s knowledge or approval.

DiMaggio exchanged business-related emails with customers using an unapproved email account, thereby causing her firm to violate its recordkeeping requirements. (FINRA Case #)

Mattia authorized an email to be sent from him to his member firm’s Office of General Counsel that contained statements concerning the resolution of a customer complaint against a firm registered representative that he knew, or should have known, were false and caused the firm to improperly report the resolution on the representative’s Form U4.

The client settlement had been improperly reported as withdrawn even though the client’s accounts had been credited with $9,198 and Mattia had personally agreed to settle the complaint. Even if Mattia believed the email might be accurate, he should have made a reasonable inquiry into the status of the complaint prior to authorizing the email to be sent, and he would have discovered that the complaint had not been withdrawn.

Kruse entered into a settlement agreement regarding a customer complaint without authorization from, and without notifying, his member firm.

Kruse sold a customer a variable life insurance policy which required payment of monthly premiums by automatic withdrawal from the customer’s bank account. Thereafter, the customer complained to Kruse that he had not been aware of the monthly withdrawals from his bank account and about the performance of the policy. The customer threatened to direct his complaint to the state insurance commissioner if Kruse did not resolve the situation to his satisfaction; Kruse then paid the customer $4,000 to settle the complaint.

Acting through Burchard, his Firm failed to

• prepare accurate general ledgers and trial balances;
• prepare accurate computations of net capital under the aggregated indebtedness standard while conducting a securities business;
• maintain or meet its minimum net capital requirement, failed to notify FINRA when its net capital declined below the minimum required under SEC Rule 15c3-1;
• prepare and file FOCUS Reports Part IIA for several calendar quarters;
• comply with the terms of its membership agreement when it acted as a dealer after executing more than 10 proprietary trades in its account during a calendar year, thereby increasing its minimum net capital requirement from $5,000 to $100,000;
• file an application for approval of a material change in its business operations as originally provided in its membership agreement;
• report customer complaints, which were discloseable events, within 10 business days and statistical and summary information of customer complaints the firm received on a quarterly basis;
• timely amend Forms U4 to disclose settlements;
• timely report settlements, arbitration awards and a default judgment that were required to be disclosed;
• develop, establish and implement an adequate AML compliance program;
• conduct and/or document adequate independent testing of its AML compliance program and procedures;
• establish procedures to ensure the designation of an AML Compliance Officer to NASD;
• NASD of any changes in contact information for its AML Compliance Officer in a reasonable amount of time and failed to implement and adequate AML training program;
• establish and implement an adequate Customer Identification Program;
• evidence that a due diligence review was performed to review the identities or beneficial owners of accounts of foreign financial institutions;
• establish adequate procedures designed to monitor, detect and investigate suspicious activity despite the presence of red flags noted in the firm’s procedures;
• prepare and maintain exception reports produced to review for unusual activity in accounts; failed to evidence due diligence in opening accounts of foreign financial institutions;
• monitor and respond to requests for information from FinCEN; and
• establish and implement policies, procedures and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act, including failure to implement policies and procedures designed to detect and report suspicious activity and to verify the identity of customers.

Burchard failed to reasonably supervise the activities of a registered representative and registered principal to ensure that she performed the supervisory responsibilities Burchard delegated to her.