Category: Enforcement

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Fined: Merrill Lynch, Pierce, Fenner & Smith Incorporated Fined by FINRA

Fined

Merrill Lynch, Pierce, Fenner & Smith Incorporated Fined by FINRA

13 December 2018

An AWC was issued in which the firm was censured and fined $300,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to reasonably supervise an associated person who, together with a third-party individual, engaged in a scheme to defraud a customer of the firm. The findings stated that the associated person introduced the customer to the third party using a fictitious name, falsely representing that the third party was a wealthy and successful businessman who could help the customer with his various, existing business and other financial needs.

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Fined: E*Trade Futures LLC fka Aperture, LLC dba OptionsHouse Fined by FINRA

Fined

E*Trade Futures LLC fka Aperture, LLC dba OptionsHouse Fined by FINRA

12 December 2018

An AWC was issued in which the firm was censured and fined $75,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it routed for execution multiple options orders to other member firms that were marked with an inaccurate origin code of “Customer,” instead of “Professional Customer.” The findings stated that the firm failed to identify customer accounts under common ownership that met the Professional Customer threshold and failed to configure the Financial Information eXchange messaging code for Professional Customer with one of its executing brokers.

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Fined: NTB Financial Corporation Fined by FINRA

Fined

NTB Financial Corporation Fined by FINRA

10 December 2018

A Letter of Acceptance, Waiver and Consent (AWC) was issued in which the firm was censured and fined $45,000. Prior to the issuance of this AWC, the firm voluntarily paid customers restitution for the subject transactions in the total amount of $43,142.06. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it charged its customers prices that were not fair in principal transactions involving a single corporate bond. The findings stated that the transactions and mark-ups charged were not fair when considering the relevant factors that should be taken into consideration when determining the fairness of markups charged to a firm’s customers. As a result, the firm charged its customers $43,142.06 in excessive mark-ups on these corporate bond transactions.

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Fined: Melvin Securities, L.L.C. Fined by FINRA

Fined

Melvin Securities, L.L.C. Fined by FINRA

19 November 2018

An AWC was issued in which the firm was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to make and keep current an accurate trial balance, general ledger and net capital calculation by failing to timely accrue liabilities for certain invoices.

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Fined: Third500, LLC fka Healthios Capital Markets, LLC Fined by FINRA

Fined

Third500, LLC fka Healthios Capital Markets, LLC Fined by FINRA

15 November 2018

An AWC was issued in which the firm was censured and fined $50,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it allowed four individuals to conduct investment banking activities without requiring that they pass the Investment Banking Representative (Series 79) examination, and become qualified and registered as investment banking representatives.

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Fined: RBC Capital Markets, LLC Fined by FINRA

Fined

RBC Capital Markets, LLC Fined by FINRA

8 November 2018

An AWC was issued in which the firm was censured and fined $215,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to implement and enforce a supervisory system reasonably designed to achieve compliance with the applicable securities laws and regulations, including SEC and FINRA rules, regarding the close-out of fail-to-deliver positions.

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Fined: J.V.B. Financial Group, LLC Fined by FINRA

Fined

J.V.B. Financial Group, LLC Fined by FINRA

6 November 2018

A Letter of Acceptance, Waiver and Consent (AWC) was issued in which the firm was censured and fined $50,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish, document and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory and other risks associated with market access.

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Fined: Investment Placement Group Fined by FINRA

Fined

Investment Placement Group Fined by FINRA

26 October 2018

An AWC was issued in which the firm was censured and fined $10,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it made payments of approximately $3.85 million in commissions earned by registered representatives to unregistered entities instead of directly to the representatives. The findings stated that each representative was a co-owner of the entity to which the firm paid the commissions.

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Fined: Avalon Investment & Securities Group, Inc. Fined by FINRA

Fined

Avalon Investment & Securities Group, Inc. Fined by FINRA

25 October 2018

An AWC was issued in which the firm was censured, fined $12,000, ordered to pay $1,515, plus interest, in restitution to customers and required to retain an independent consultant to conduct a comprehensive review of the adequacy of the firm’s policies, systems and procedures (written and otherwise) and training relating to the violations identified in the AWC.

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Fined: Maxim Group LLC Fined by FINRA

Fined

Maxim Group LLC Fined by FINRA

19 October 2018

An AWC was issued in which the firm was censured, fined $65,000, ordered to pay $167,780.49, plus interest, in restitution to customers and required to review and revise, as necessary, its systems, policies and procedures (written and otherwise) and training with respect to the sale of Unit Investment Trusts (UITs). Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a supervisory system, and establish, maintain and enforce WSPs, reasonably designed to detect and prevent unsuitable short-term trading in UITs.

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Fined: Morgan Stanley & Co. LLC Fined by FINRA

Fined

Morgan Stanley & Co. LLC Fined by FINRA

October 18, 2018

An AWC was issued in which the firm was censured and fined a total of $56,000, of which $8,000 is payable to FINRA. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to take reasonable steps to establish that intermarket sweep orders (ISOs) it had routed met the definitional requirements set forth in the Securities Exchange Act of 1934 Rule 600(b)(30) of Regulation NMS primarily due to systems issues. The findings stated that as a result of the systems issues, the firm routed ISOs to multiple markets, which potentially traded through protected quotations in NMS stocks.

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Fined: MBSC Securities Corporation Fined by FINRA

Fined

MBSC Securities Corporation Fined by FINRA

18 October 2018

An AWC was issued in which the firm was censured and ordered to pay $971,289.07, plus interest of $242,955.64, in restitution to customers. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a supervisory system and Written Supervisory Procedures (WSPs) reasonably designed to monitor the transmittal of funds from customer accounts to third parties.

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Fined: Lenox Financial Services, Inc. Fined by FINRA

Fined

Lenox Financial Services, Inc. Fined by FINRA

18 October 2018

An AWC was issued in which the firm was censured and fined $15,000. A lower fine was imposed after considering, among other things, the firm’s revenue and financial resources. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to make required financial interest and beneficial ownership disclosures in research reports.

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