Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2011
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.
May 2011
Pyramid Financial Corp. and John Hsu a/k/a Juan Hsu (Principal)
2008011600501/May 2011

The Firm and Hsu failed to preserve electronic communications related to the firmís business when Hsu and another registered representative of the firm sent and received electronic communications related to the firmís business using personal email accounts that were not linked to the firmís email preservation system; the firmís failure to preserve electronic communications was considered willful.

Hsu and the firm failed to comply with AML rules and regulations in that they failed to access the Financial Crimes Enforcement Network (FINCEN) and review records, failed to develop and implement a written AML program reasonably designed to achieve compliance with the BSA and implementing regulations, and failed to properly conduct annual independent tests of its AML program for several years. Hsu signed and submitted certifications to FINRA that contained inaccurate information regarding preservation of emails in compliance with SEC Rule 17a-4. Hsu willfully failed to amend his Form U4, to disclose material information.

Pyramid Financial Corp.: Fined $55,000 jointly and severally with Hsu

John Hsu a/k/a Juan Hsu (Principal): Fined $55,000 jointly and severally with Pyramid; Fined an additional $10,000; Suspended 45 business days in all capacities; Barred as a Principal only.

Tags:  Electronic Communications    Email    Willfully    AML     |    In: Cases of Note : FINRA
Bill Singer's Comment
Can't remember seeing a FINRA finding that the failure to preserve emails was "willful," so this must have struck the regulator as a particularly egregious case.
April 2011
James Gabor Doering (Principal)
AWC/2009018661401/April 2011
Doering willfully failed to disclose material information on his Form U4. Doering completed annual certifications for his member firm in which he falsely answered ďnoĒ to whether he had been the subject of a Form U4 reportable event.
James Gabor Doering (Principal): Fined $5,000; Suspended 4 months
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