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.
TransAmSecurities, Inc. AWC/2008011723701/December 2009
The Firm failed to establish, maintain and enforce a supervisory system and procedures reasonably designed to preserve and review its business-related electronic communications. The Firmís electronic media storage system was deficient in that electronic business-related communications could be deleted from the system prior to being preserved in the requisite non-rewriteable, non-erasable format.
The Firm allowed its associated persons to use outside email addresses to send or receive electronic business-related communications, but the firmís system did not preserve communications from outside email addresses unless the communications were sent from or forwarded to a firm-provided email address, and the firm did not require its associates to route all business-related communications from outside email addresses through its system. The Firm did not have written procedures in place to ensure that its associated persons were routing all electronic business-related communications sent from or received in outside email addresses through the system.
ViewTrade Securities, Inc. AWC/2008011725001/December 2009
The Firm failed to properly implement its AML compliance program, insofar as it did not monitor corporate accounts brought to the firm from a defunct broker-dealer by registered representatives for red flags and did not identify potentially suspicious activity for further due diligence.
A registered representative at the firm sent business-related emails from a non-firm email address that were not maintained on the firmís server in a non-rewritable, non-erasable format, but were obtained from the representativeís computer, where they could have been deleted or lost.
Wadsworth Investment Co., Inc. and William Frederick Wadsworth (Principal) OS/2006003806202/November 2009
The Firm and Wadsworth
permitted an individual to act as an unregistered principal and permitted individuals to be registered as General Securities Representatives or Investment Company and Variable Contracts Products Representatives through the firm without being active in the firmís securities business;
sent written communications to customers and prospective customers containing language that failed to provide a sound basis for evaluating the claims within the communications, and that omitted material information and/or contained unwarranted statements;
failed to record a
general securities principalís approval on mutual fund and variable
completed and signed a materially inaccurate FINRA
Information Request form; and
provided inaccurate information to FINRA
Acting through Wadsworth, the Firm failed to
establish and , maintain a supervisory system and written supervisory procedures reasonably designed to achieve compliance with applicable securities laws and regulations;
conduct annual reviews of any of the business in which the firm engaged
review registered representativesí business-related email correspondence with customers;
establish any written procedures providing for the review of its registered representativesí electronic correspondence;
designate and specifically identify at least one principal to FINRA who would establish, maintain and enforce a system of supervisory control policies and procedures, a
establish, maintain and enforce written supervisory controlpolicies and procedures
required information on new account forms, and on mutual fund and
variable annuity applications.
Acting through Wadsworth, the Firm
maintained forms of various types that were blank except for customersí
filed inaccurate Financial
and Operational Combined Uniform Single (FOCUS) reports setting forth
the firmís net capital position that was accurate by failing
to maintain accurate financial books and records; and
did not file an
application with FINRA for approval of an ownership change until after
the ownership change took place.
The Firm failed to
implement anti-money laundering compliance procedures, including independent testing and provide training;
enforce the Customer Identification Procedures;
retain electronic communications; and
failed to provide written confirmations to customers at or before the completion of securities transactions acted as an unregisteredmunicipal securities broker-dealer.
The Firm executed municipal securities transactions without creating and retaining order tickets to properly recordthe transactions, and failed to report municipal securities trades to the MSRB.
Wadsworth Investment Co., Inc.: Censured; Fined $100,000 ($77,250 jt/sev with William Wadsworth); Required to hire an independent consultant to review its policies,
systems, procedures (written and otherwise) and training related to its
violations of federal securities laws, FINRA and MSRB rules, and
implement the consultantís recommendations. William Frederick Wadsworth: Fined $77,250 jt/sev with the Firm; Suspended 1 month in all capacities; Suspended 1 year in Principal capacities only.
Anthony Basir Shakoor AWC/2007009449201/October 2009
Shakoor posted messages to an electronic bulletin board using the email his member firm assigned to him, which identified him to other users as an employee of his member firm. Since the messages discussed securities, identified Shakoor as a firm employee and were disseminated to the public, he was required to obtain a firm principalís approval but failed to do so. Shakoor failed to disclose material information in posted messages and/or the messages were misleading because they failed to include a sound basis for the securities, and failed to disclose that he held positions in some of the securities for which he made recommendations. Shakoor posted messages that contained claims that were false, exaggerated, unwarranted and/or misleading; and posted messages containing recommendations without providing a reasonable basis, and predictions or projections of future stock.
Anthony Basir Shakoor: Fined $10,000; Suspended 6 months in all capacities
The SEC charged 15 broker-dealers with violating certain recordkeeping provisions of the Securities Exchange Act and with failing reasonably to supervise with a view to preventing and detecting those violations. Additionally, the SEC charged affiliated advisor DWS Investment Management Americas, Inc. with violating certain recordkeeping provisions... Read On