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- Banca IMI Securities to Pay $35Mn for Improper Handling of ADRs in Continuing SEC Crackdown
- Members of White House ‘Arts Panel’ Resign En Masse in Protest of Trump
- FINRA Whiffs on Disciplinary Sanction: Bill Singer's 'Negligent Market Manipulation in OTC Stock Promotion'
- Heather Heyer’s Mother Says, ‘I’m Not Talking to the President’
- Goldman Sachs May Have Lost $100Mn on Energy Bet Gone Wrong
- SEC Drops Case Against Ex-JPMorgan Traders Over 'London Whale'
- Financial Advisers That Invest in Technology Need to Accomplish These Two Things
- FINRA Amends Codes Regarding Expedited Arbitrator List Selection
- FINRA July 2017 Quarterly Disciplinary Review (Podcast)
- Senior Exec in Citigroup's Equities Unit Has Left
- Prudential Plotting its Escape From Fed's Tough Oversight
- Why CEOs Spurned Trump's Business Councils, in Their Own Words
- A Stockbroker, Her LLC, and Her Customers' Loans (Or Investment?) - Bill Singer
- Brian Quintenz Sworn In as CFTC Commissioner
- A Gary Cohn Resignation Would 'Crash the Markets' – Mgmt Guru Jeffrey Sonnenfeld
- Trading Firm DRW to Buy RGM Advisors - As Low Volatility Forces Out Weak HFT Players (subsc reqd)
- Reputational Damage - Rajat Gupta on Hard Road to Recovery
- 7th Circuit Affirms Spoofing Conviction - Bill Singer
- Wells Fargo Announces Board Changes
- Judge Rules Against Ex-Goldman Employee in Fed Leak Case
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NEWSLETTERS & ALERTS
Firms Failed to Supervise Outside Business Activities, Private Securities Transactions
by Howard Haykin
CapFi Partners agreed to a $12.5K fine to settle FINRA charges pertaining its supervision of outside business activities and private securities transactions by its registered reps. TGP Securities agreed to a $10K fine to settle FINRA pertaining private securities transactions by its registered reps. In each case, FINRA imposed a lower fine after considering, among other things, each respective firm’s revenue and financial resources.
BACKGROUNDS. McLean, Va-based CapFi Partners, a FINRA member since 2001, has some 6 registered reps and one branch office. CapFi's principal activities are the marketing of hedge funds and private equity funds, the private placement of securities, and investment advisory services. The firm had no relevant disciplinary history.
Summit, NJ-based TGP Securities, a FINRA member since 2012, has some 17 registered reps. Its principal activity is the private placement of securities. TGP had a prior AWC relating to review and retention of email.
FINRA FINDINGS – CAPFI PARTNERS. In October 2014 and November 2014, CapFi failed to document its review of 2 separate requests from registered reps to engage in outside business activities and one request to engage in private securities transactions. While the firm orally conveyed its approval or disapproval to the RRs, it never documented its review and disposition of these requests. Such failures would be in violation of FINRA Rule 3270 and other rules.
From March 2012 to September 2015, CapFi failed to review the electronic communications for one of its registered reps. Such oversights would be in violation of FINRA Rule 3110 and other rules.
FINRA FINDINGS – TGP SECURITIES. From November 2014 through March 2015, a TGP Securities registered rep executed transactions on behalf of his investment advisory customers through another brokerage firm. From December 2013 to February 2015, a different registered rep solicited investments in private securities offerings through his own investment advisory firm. Both RRs received compensation for these activities.
While both registered reps disclosed these outside activities, TGP Securities never recorded the transactions on its books, and did not supervise their participation in these private securities transactions.
These cases were reported in FINRA Disciplinary Actions for May 2017.
For details on the CapFi Partners case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015043383901.
For details on the TGP Securities is case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015043159502.