- within Intellectual Property, International Law, Litigation and Mediation & Arbitration topic(s)
- in Europe
A broker-dealer settled FINRA charges for failing to supervise one of its former registered representatives, who allowed her then-husband to engage in securities business with the broker-dealer's customers. At the time, the husband was serving a one-year suspension imposed by FINRA.
According to FINRA, the broker-dealer hired the husband upon the completion of his suspension. FINRA alleged that the broker-dealer failed to detect that the husband recommended unsuitable trades to customers. FINRA charged the broker-dealer with violating FINRA Rules 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade") by failing to (i) reasonably supervise its registered representatives and (ii) investigate red flags of possible misconduct by its registered representatives.
To settle the charges, the broker-dealer agreed to a (i) censure, (ii) $300,000 fine, and (iii) restitution to a customer in the amount of $76,344.20 plus interest.
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