FINRA fined and suspended a Registered Principal - the SVP of Compliance at Veritrust Financial - for having committed a host of violations and for failing to supervise several areas of his member firm’s securities business.  Specifically, FINRA found that Austin, TX-based David Elijah McKee, having spent some 8 and 1/2 years at the firm, and acting on the firm’s behalf:

• failed to establish and maintain adequate supervisory procedures to detect and prevent the firm from charging excessive commissions on mutual fund liquidation transactions.
• failed to adequately supervise firm communications with the public.
• failed to adequately supervise firm’s compliance with NASD Rule 3070 as it pertained to Forms U-5 and customer complaints.
• failed to prepare adequate reports in compliance with NASD Rules 3012 and 3013:
  • one year's Rule 3012 report failed to provide a rationale for the areas that would be tested, failed to detail the manner and method for testing and verifying that the firm’s system of supervisory policies and procedures were designed to achieve compliance with applicable rules and laws, and did not provide a summary of the test results and gaps found.
  • firm’s 3012 report also failed to detect repeat violations including, the failure to conduct annual OSJ/branch office inspections, advertising violations, customer complaint reporting and ensuring that all covered persons participated in the CEP Firm Element.
  • one year's firm 3013 report did not document the processes for establishing, maintaining, reviewing, testing and modifying compliance policies to achieve compliance with applicable NASD and MSRB rules, or federal securities laws, and the manner and frequency with which the processes are administered.
  • firm failed to enforce its 3013 procedures re: notification from customers regarding address changes.

For his 'efforts', McKee was fined $15K and suspended as principal or supervisor for 30 business days.  This is FINRA Case #2008011640801. [Disciplinary Actions for June 2011]

C-I Post-Script. Following his suspension and departure from Veritrust, McKee - armed with 8 and 1/2 years compliance experience at Veritrust, and Series 4, 7, 24, 53, and 66 securities licenses - decided to move on from broker-dealers and currently is an owner of 2 investment advisory firms [CI Note: do you think it's because he's subject to less stringent regulatory requirements?].  In any case, presuming his advisory firms are state-registered, it would be interesting to know just how much the IA regulators know about his past and closely they're monitoring his performance.  Don't worry.  We're not holding our breath, either.