If You Delegate Responsibilities, at Least Visit the Offices!

[ by Howard Haykin ]

A Registered Principal in South Jordan, UT, agreed to settle FINRA charges that he failed to perform his supervisory responsibilities as an Office of Supervisory Jurisdiction (OSJ) supervisor who conducted numerous on-site visits.  Instead, as FINRA hopes will be borne out in its findings, the Principal instead delegated them to unregistered persons.

Profile of Respondent.   Brendan R. Murton started out in the financial industry In November 1993, working as a life insurance agent in Las Vegas, NV, with Primerica Life Insurance Company, an affiliate of PFS Investments ("PFSI").  In July 1994, he obtained a Series 6 license and worked as an Investment Company Products/Variable Annuity Contract Representative ("IR") at a PFSI branch office located in South Jordan, UT.   In January 1996, Murton obtained a Series 26 license and worked as an Office of Supervisory Jurisdiction Supervisor ("OSJS").  He currently is working as an IR at PFSI and remains under FINRA's jurisdiction.

FINRA Findings and Allegations.   From October 2007 through December 2008 ("the relevant period"), Murton's employing firm required each OSJS to perform annual on-site supervisory visits of each branch office assigned to the OSJS. Murton had responsibility for conducting numerous on-site visits as an OSJS during the relevant period. 

However, it's alleged that he failed to perform 26 of them, and instead delegated that responsibility to 2 unregistered individuals.  That would amount to 59% of his assigned workload - or total number of Leadership Visits (LVs) -

Further alleged misconduct or violations included the following:

• Murton failed to obtain the member firm’s approval for him to delegate these responsibilities to someone else.
• Because the individuals assisting Mr. Murton, were not registered , it's probable that the firm would not have given its OK to the delegation.
• Nevertheless, Murton submitted, or caused to be submitted, numerous LV forms, which his staff - and not he - prepared - which erroneously reflected that he had performed LVs.  
• the false forms became part of the firm’s books and records, thereby causing them to be false.

FINRA's Reported Violations and Sanctions.   FINRA notes that someone who fails to carry out his or her supervisory responsibilities would violate NASD Rules 3010 and 2110.  For allegedly causing his firm's books to be incorrect,  Murton would have violated

Murton agreed to accept the following FINRA sanctions:  a $5K fine;  a 30-day suspension in any capacity;  an order to qualify or requalify by examination before acting in any principal capacity. 

On 1/20/11, Murton had the misfortune of of being disciplined by the Utah Division of Securities, as follows:  a $10K fine;  a 5-day suspension in any capacity; a 2-year suspension from acting in any principal capacity;  an order that Murton requalify by examination before acting in any principal capacity.

For further details, go to:   [FINRA AWC Case #2011026367401 ].  The case was presented in the FINRA Discplinary Actions for January 2013.