UVEST Financial Services Group, based in Charlotte, NC, agreed to settle FINRA charges that it failed to comply with its obligations for registered reps who operated registered investment advisory (RIA) programs.  These individuals were dually-registered as representatives and RIAs, had assets under management in excess of $350 million, and maintained brokerage accounts for their advisory clients away from the firm - ans participated in the execution of securities transactions through broker-dealers other than UVEST, involving mostly equity investments. 

The problems centered around the fact that UVEST regarded these programs as separate and apart from the firm - i.e., as outside business activities, that were not affiliated with the firm.  As a result ... the firm failed to comply with its obligations under NASD Rule 3040 - including:

• obligations to supervise registered representative/investment adviser (RR/IA)s’ participation in the securities transactions executed through broker-dealers other than the firm;
• obligations to establish, maintain and enforce a supervisory system to supervise the RR/IA activities reasonably designed to provide an understanding of the nature of the services provided by its RR/IAs, the scope of each RR/IA’s authority, and the suitability of the transactions in which the RR/IA participated;  
• needless to say, the firm's WSPs did not specifically address supervision of the securities activities of outside RIAs until a later date.

• obligations to record the transactions executed away from the firm in its books and records.

The firm was fined $75,000.  This is FINRA Case #2008012048601.    [Disciplinary Action for May 2011]