BROWSE BY TOPIC
Stories of Interest
- Banca IMI Securities to Pay $35Mn for Improper Handling of ADRs in Continuing SEC Crackdown
- Members of White House ‘Arts Panel’ Resign En Masse in Protest of Trump
- FINRA Whiffs on Disciplinary Sanction: Bill Singer's 'Negligent Market Manipulation in OTC Stock Promotion'
- Heather Heyer’s Mother Says, ‘I’m Not Talking to the President’
- Goldman Sachs May Have Lost $100Mn on Energy Bet Gone Wrong
- SEC Drops Case Against Ex-JPMorgan Traders Over 'London Whale'
- Financial Advisers That Invest in Technology Need to Accomplish These Two Things
- FINRA Amends Codes Regarding Expedited Arbitrator List Selection
- FINRA July 2017 Quarterly Disciplinary Review (Podcast)
- Senior Exec in Citigroup's Equities Unit Has Left
- Prudential Plotting its Escape From Fed's Tough Oversight
- Why CEOs Spurned Trump's Business Councils, in Their Own Words
- A Stockbroker, Her LLC, and Her Customers' Loans (Or Investment?) - Bill Singer
- Brian Quintenz Sworn In as CFTC Commissioner
- A Gary Cohn Resignation Would 'Crash the Markets' – Mgmt Guru Jeffrey Sonnenfeld
- Trading Firm DRW to Buy RGM Advisors - As Low Volatility Forces Out Weak HFT Players (subsc reqd)
- Reputational Damage - Rajat Gupta on Hard Road to Recovery
- 7th Circuit Affirms Spoofing Conviction - Bill Singer
- Wells Fargo Announces Board Changes
- Judge Rules Against Ex-Goldman Employee in Fed Leak Case
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Allstate Financial Services Pays $1Mn to Settle FINRA Charges
FINRA Disciplinary Actions for February: AWC #2015047806501.
Allstate Financial Services, of Lincoln, NE, (Allstate) agreed to a $1 million fine to settle FINRA charges that it failed to supervise certain communications and transactions, retain certain records, and provide customers with certain required notices and information. The issues were largely attributed to 5 systemic problems, some of which lasted as long as 15 years.
Allstate is a retail broker that’s been registered since 1986. As of 11/3016, the firm had 7,411 branches and 8,865 registered persons.
The following are principal issues actions noted in this case:
FINRA FINDINGS RE: EMAIL REVIEWS. The firm omitted some 3,500 secondary email accounts from the list of email accounts to be monitored. As a result:
- Approximately 44 million emails were never reviewed - included about 11,000 emails with customers or otherwise relating to the firm’s securities business.
- For obvious reasons, those business-related emails were never retained.
- The firm didn’t have adequate safeguards to ensure that its software system captured every relevant email.
FINRA FINDINGS RE: CONSOLIDATED REPORTS SENT TO CUSTOMERS. Registered reps were permitted to create consolidated reports that they provided to customers. While the firm generally required its registered persons to retain copies of retail communications, it did not adequately instruct its registered persons that its retention policy applied to consolidated reports. As a result:
- The Firm retained very few of the consolidated reports that its registered reps distributed to customers.
FINRA FINDINGS RE: CUSTOMERS HOLDING MUTUAL FUNDS AND VARIABLE ANNUITIES. Firm records for these customers were missing or incomplete, and those accounts were not linked to the firm’s software system that generated various notices. As a result:
- The firm didn’t verify the identity of certain of those accounts’ owners.
- The firm didn’t determine whether recommendations were suitable for those customers.
- The firm didn’t send required periodic account records and notices explaining the firm’s privacy policies to those customers.
- One reason for the problem was that registered persons submitted some of the accounts directly to product sponsors, bypassing the firm’s systems – which violated a firm policy that was inconsistently enforced.
- Another reason was accounts being transferred in from other firms were not properly documented.