- within Intellectual Property, International Law, Litigation and Mediation & Arbitration topic(s)
A firm settled FINRA charges for failing to establish a supervisory system designed to monitor employees' outside brokerage accounts.
In a Letter of Acceptance, Waiver and Consent, FINRA found that the firm did not, among other things, (i) have an automated system to track whether new hires had disclosed all existing accounts or (ii) require employees to annually certify disclosure of all outside brokerage accounts. FINRA also found that the firm's Global Personal Account Trading system created a backlog of instances where trade and account data could not be matched to specific employee accounts, which prevented the timely monitoring of trading in those accounts.
The firm was found in violation of FINRA supervisory rules 3110(a) and 3110(b), as well as Rule 2010 ("Standards of Commercial Honor and Principles of Trade"). To settle the charges, the firm agreed to (i) a censure and (ii) a $345,000 fine.
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