Brean Murray Carret & Co. of New York, NY, agreed to settle FINRA charges that it permitted individuals to function as principals without being registered as general securities principals (GSPs).  Each was registered as a General Securities Representative, and one also was registered as a research analyst.

FINRA found that each individual was actively engaged in the management of the firm’s investment banking and/or securities business by, among other things, supervising persons associated with the firm.  This indicated that the firm did not establish and maintain an adequate supervisory system to achieve compliance registration rules and regs, by not ensuring that each had the requisite registrations to supervise employees and business areas to which they were assigned.

The firm specifically failed to promptly identify all persons who needed principal registrations and, after identifying individuals who should become registered as principals, the firm permitted them to delay taking the required examinations, which, in turn, contributed to the registration violations. 

Fines and Sanctions.   Brean Murray Carret will pay a $40K fine and will be required to review its supervisory system and WSP's in this area, and determine whether individuals previously identified as requiring principal registration have, in fact, become so registered.  A written report detailing its review, findings and recommendations must be submitted to FINRA.  A firm officer must certify to FINRA in writing that the firm has completed its review and has established systems and procedures regarding principal registration. 

This is FINRA Case #2009016262303.   [Disciplinary Actions for June 2011]