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.
November 2010
Aura Financial Services, Inc. and Timothy Michael Gautney (Principal)
OS/2008011565203/November 2010

Acting through Gautney, Aura Financial Services failed to

  • establish, maintain and enforce an adequate supervisory system and adequate written supervisory procedures to detect and prevent excessive trading in customer accounts;
  • reasonably supervise registered representatives; and
  • respond to red flags indicating the representativesí apparent excessive trading.

The Firm failed to comply with a previous Offer of Settlement, which Gautney signed on the firmís behalf, requiring each to pay $100,000 in restitution to customers; approximately half of which remains unpaid.

Gautney failed to respond to a FINRA request to provide testimony.

Aura Financial Services, Inc.:  Suspended from association with any FINRA member until a total of $42,166.60, plus interest, is paid in restitution to customers.

Timothy Michael Gautney: Ordered to pay a total of $42,166.60, plus interest, in restitution to customers; Barred from association with any FINRA member in any Principal capacity; Suspended 8 months all capacities

Tags:  restitution         |    In: Cases of Note : FINRA
Bill Singer's Comment
One of the more unusual sanctions that I've seen in some time.  Here, the firm is suspended until such time as it pays $42,166.60 in customer restitution. I'm still not sure that I understand whether both the Firm and Gautney are each required to pay the same dollar amount or whether it's joint/several (which would seem to make sense but that's not stated). 
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