Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2012
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
January 2012
AOS, Inc. dba TradingBlock
AWC/2009016353501/January 2012
AWC/2009016353501/January 2012
The Firm entered into a trading agreement
with a foreign broker dealer
whose owner had his customers open fully disclosed accounts with
the firm where
the owner had discretionary trading authority, and negotiated a
special compensation
structure with the firm for option and equity transactions.
Approximately three months after the firm entered into the trading
agreement with the
owner, it terminated its relationship. The firm informed the
customers that the owner
would no longer be able to exercise discretion in their accounts,
and the customers
transferred their accounts to another firm. The customers
were not able to avail themselves of the full services they paid
the firm upfront because
their accounts were transferred to another firm before their
positions expired. The firm’s service charges were greater than
the amount warranted by
market conditions, the cost of executing the transactions, the
value of services the firm
rendered and other pertinent factors; the total overcharges were
$41,593.23.
The firm’s WSPs in effect at the time were
inadequate because they
stated that no special review was performed of commission activity
in accounts with third party
authorization. By maintaining a written procedure that abdicated
responsibility
to review commission charges or in customer accounts where a third
party had trading
authority, the firm failed to ensure compliance with all
applicable rules including NASD
Rule 2440.
AOS, Inc. dba TradingBlock : Censured; Fined $15,000; Ordered to pay $41,593.23 plus interest in restitution to affected customers.
Tags: Commissions | In: Cases of Note : FINRA
Enforcement Actions
Tags
- AML
- Annual Compliance Meeting
- Borrowing
- Changes Of Address
- Checks
- Commissions
- Confidential Customer Information
- Due Diligence
- Elderly
- Electronic Communications
- Electronic Storage
- Embezzled
- Installment Plan Contracts
- Internet
- Life Settlement Contracts
- LOA
- Membership Agreement
- Money Laundering
- Mortgage
- OSJ
- Ponzi
- Private Placement
- Referral Fees
- Supervision
- Testing
- Unregistered Person
- Unregistered RRs
- Unregistered Securities
- Variable Annuity
- WSPs