Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2010
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.
March 2010
Raymond James & Associates, Inc.
AWC/2008015756901/March 2010
The Firm did not cause the exercise of time and price discretion to be reflected on an order ticket for applicable orders entered into its electronic Order Management System (OMS), or another firmís OMS, causing the firm to violate FINRA recordkeeping provisions. The Firm implemented a change to its electronic OMS, satisfying the specificity requirements of NASD Rule 2510(d)(1), but did not implement a similar change to another OMS that its financial advisors used for larger orders. By not conducting adequate supervisory reviews of data relating to the exercise of time and price discretion, and by not having a system or procedure in place to produce certain order ticket data in connection with regulatory requests for order tickets, the firm failed to exercise reasonable supervisionby not having adequate systems or procedures in place to cause it to be in compliance with the order ticket
Raymond James & Associates, Inc. : Censured; Fined $100,000; Required to review its practices and procedures concerning its compliance with NASD Rule 2510(d)(1) to include a determination of * whether any order entry system the firm uses permits a registered representative or other associated person to exercise discretion as to the price at which or the time when an order given by a customer for the purchase or sale of a definite amount of a specified security shall be executed, and * whether it has systems and procedures in place that are reasonably designed to cause an exercise of time and price discretion in that security to be reflected on the order ticket. The firm shall develop written policies and procedures and cause changes to be made to its (or its agents) operational systems reasonably designed to cause the firm to be in compliance with NASD Rule 2510(d)(1).
Tags:  Time & Price Discretion     |    In: Cases of Note : FINRA
Bill Singer's Comment
Consider this Registered Rep. magazine article from my Street Legal Column: Ain't What It Used to Be, which discusses Time And Price Discretion issues. http://registeredrep.com/advisorland/compliance/finance_price_discretion_1101/

January 2010
Jessie Everett Airington
AWC/2008015428301/January 2010
Registered Principal Airington consented to the described sanctions and to the entry of findings that he executed transactions in a public customerís account using time and price discretion that the customer had previously verbally granted him, without reconfirming with the customer his desire to execute the transactions. Airington executed the transactions without the customerís prior written authorization and without his member firm ís acceptance of the account as discretionary.
Jessie Everett Airington: Fined $5,000; Suspended 10 business days in all capacities
Tags:  Time & Price Discretion         |    In: Cases of Note : FINRA
Bill Singer's Comment

Notwithstanding the requirements of proposed FINRA Rule 3260(a), members may exercise:

  1. time or price discretion given by a customer during a normal trading session, provided that such discretion is only valid during that session; or
  2. time or price discretion given by a customer after the close of a normal trading session, provided that such discretion is only valid during the next normal trading session.

Such limited time or price discretionmay be given orally by a customer. The proposed change has no impact on the duration of good-Ďtil-canceled orders for institutional accounts (as set forth in current NASD Rule 2510(d)(1)).

Enforcement Actions
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