- within Intellectual Property, Food, Drugs, Healthcare, Life Sciences and Transport topic(s)
A broker-dealer settled FINRA charges for failures to supervise and to establish and implement a satisfactory system of risk management controls.
FINRA alleged that the broker-dealer failed to implement supervisory procedures reasonably designed to prevent (i) the entry of customer orders that exceeded appropriate pre-set credit or capital thresholds, (ii) the entry of incorrect orders and (iii) the entry of orders that failed to meet "regulatory requirements which must be satisfied on a pre-order entry basis." FINRA also alleged that the broker-dealer failed to document its annual reviews of the firm's business activity in connection with market access, and that CEO certifications regarding market access were insufficient. As a result of the broker-dealer's regulatory deficiencies, FINRA charged the broker-dealer with violations of SEA Rule 15c3-5 ("Risk Management Controls for Brokers or Dealers with Market Access"), FINRA Rule 3110 ("Supervision") and Rule 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the charges the broker-dealer agreed to (i) a censure, (ii) a fine of $50,000 and (iii) revise its risk management controls and supervisory procedures.
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