A Registered Principal in Hicksville, NY, agreed to a 9-month suspension and other sanctions, to settle FINRA charges he committed numerous supervisory failures while serving as his member firm’s CCO and AMLCO.  Other Sanctions:  Before rejoining any member firm, Kobin must retake the Series 24 exam, complete 16 hours of AML CE training, and fully / promptly cooperate with FINRA in any and all investigations and/or disciplinary proceedings coming out of this case. 

   Alleged AML Failures.   Principal Kobin allegedly failed to access FinCEN and thus, didn't note FinCEN has requested information ("RFI"), under Section 314(A) of the USA Patriot Act, re: possible money laundering or terrorist activity.  He further failed to search firm records to determine whether the firm maintained, or had maintained, any account for, or had engaged in any transactions with, any individual, entity or organization named in FinCEN’s requests.

As his firm's AMLCO, Kobin further caused the firm to fail to timely detect, investigate and report suspicious activity, because Kobin allegedly:

• failed to identify red flags in connection with suspicious account activity.
• failed to implement the firm’s procedures for suspicious activity detection and reporting.
• failed to monitor and investigate approximately $6 million in suspicious wires to and from one of its branches.
• failed to detect and timely report suspicious activity and maintain documentation evidencing a review for suspicious activity of securities transactions, money movements and securities transfers.
• failed to ensure that a designated principal review and approve all correspondence to and from branch offices, including e-correspondence.

    Alleged CCO Failures.   As his firm’s Chief Compliance Officer, Kobin:

• failed to properly create, maintain and timely file records and reports of customer complaints.
• failed to timely update Forms U4 and U5 of associated persons. 
• failed to take adequate steps to comply with CEP Firm Element requirements, in that firm did not conduct the required annual needs analysis or to develop a written training plan.
• failed to ensure that each registered person was clearly assigned to an appropriately RR registered and/or principal responsible for supervising that person’s activities.
• failed to conduct an annual compliance interview or meeting.
• failed to implement an adequate supervisory control system over the firm’s BOM's (branch office managers), sales managers or any person performing a similar function.  Specifically:
  
  • firm’s WSP's failed to identify producing managers so as to review and supervise their customer account activity;
  • failed assign a person who was either senior to, or otherwise independent of, the producing manager to perform such supervisory reviews;
  • failed to reasonably ensure that the firm calculate, on a rolling, 12-month basis, whether heightened supervision requirements were triggered with any respect to any producing managers.

[FINRA Disciplinary Actions for December, Case #2008011678304]