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
First Bermuda Securities (BVI) LTD and Jeffrey Gerald Conyers (Principal)
AWC/2010021124201/January 2012
AWC/2010021124201/January 2012
For more
than four years, the firm
relied exclusively on electronic storage media to preserve its
business-related electronic
communications. The firm’s electronic storage media system was
deficient because such
communications could be deleted from the system prior to being
preserved in the requisite
non-rewritable, non-erasable format.
In contravention of its WSPs,
the firm permitted Conyers, its president and CCO, to use a
personal email address, through
his handheld communication device, to send and receive
business-related electronic
communications, which were not captured by the firm’s system and
thus were not retained
nor reviewed by the firm, unless they were sent to or from a
firm-provided email address.
The firm failed to evidence its
review of its business-related
electronic communications, in violation of its WSPs.
Through Conyers, the Firm permitted non-registered persons to act in
a capacity requiring
registration as a principal; and permitted non-registered persons
to accept or approve a total of more than 300 new customer
accounts. As a result, the firm failed to maintain records signed by a principal
who had accepted or
approved new customer accounts.
First Bermuda Securities (BVI) Ltd.: Censured; Fined $10,000 jt/sev with Conyers; Fined additional $40,000
Jeffrey Gerald Conyers: Censured; Fined $10,000 jt/sev with First Bermuda;
Park Avenue Securities LLC
AWC/2009016911203/January 2012
AWC/2009016911203/January 2012
The Firm conducted an inadequate investigation ofits representatives’ involvement in a Ponzi scheme and of allegations two registered representatives made. The firm became aware that two of its registered representatives had participated in unapproved private securities transactions by facilitating investments in the Ponzi scheme for themselves and others, some of whom were firm customers, without notifying the firm or obtaining its permission. The firm initiated an investigation regarding their conduct and to determine whether any other registered representatives were involved in the Ponzi scheme. The firm sent a questionnaire to its registered representatives in two states soliciting information about any involvement in the Ponzi scheme. Notwithstanding the allegation two registered representatives made that one of the firm’s insurance supervisors knew about their involvement with the Ponzi scheme, the firm permitted him to be one of the people collecting responses to the firm’s questionnaire.
The firm failed to fully investigate the extent of the insurance supervisor’s involvement with the Ponzi scheme despite evidence discovered later that should have led the firm to conclude that he was involved.
Counsel for the two registered representatives informed the firm that a member of the firm’s supervisory staff had suggested that the registered representatives destroy documents and provide misleading information in connection with the firm’s internal investigation. Under the circumstances, the firm took inadequate steps to investigate these allegations.
The firm had an inadequate system for reviewing electronic communications. The firm’s computer system allowed compliance staff in branch offices, in certain circumstances, to review their own email as well as the email of their supervisors.
Park Avenue Securities LLC: Censured; Fined $175,000
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