The following accounts were extracted from FINRA's Disciplinary and Other Actions for October 2010.

1.  failing to file requested audited annual reports.  Firm fined $5K, jointly and severally with an RR, and suspended from association with any FINRA member, in any capacity, for 4 months.  FCS Securities will be expelled if it doesn't submit the annual reports within 4 months.  

2. failing to submit route reports or for transmitting reports to OATS that contained inaccurate, incomplete or improperly formatted data.  Firm fined $110K, and required to revise WSP's for best-ex, trading halt activity and unit aggregation, OATS, soft dollar accounts, and trading.  Cowen allegedly:

(i)  failed to include a desk timestamp and related desk information,  (ii) incorrectly included a reporting exception code of “R,”  (iii) failed to submit the correct capacity,  (iv) and/or incorrectly submitted desk reports, and (v) firm also failed to submit one required route report.  Firm failed to submit to the FNTRF, for the offsetting, “riskless” portion of “riskless” principal transaction(s) in designated securities, either a clearing-only report with a capacity indicator of “riskless principal,” or a non-tape, non-clearing report with a capacity indicator of “riskless principal,” and failed to report last sale reports of transactions in designated securities to the FNTRF.  It also failed to prepare accurate customer confirmations, failed to disclose its correct capacity in transactions and incorrectly disclosed its compensation as commission.   And so on.  

3.  relying on the honor system for preserving, maintaining and reviewing its RRs' emails with the public.  Firm fined $75K.  Farmers Financial Solutions allegedly allowed RRs to use email to conduct business even though it didn't have an automated system for email surveillance or archiving.  Firm relied upon its RRs to electronically forward their emails to a dedicated internal email address for purposes of supervisory review by a principal and archiving.  

4.  failing to follow its AML procedures as they pertained to suspicious activity or trading.  Firm was fined $600K, required to have its president and CEO each complete 8 hours of AML training within 6 months, and prohibited for one year from purchasing penny stocks for either proprietary or customer accounts, and from making a market in such stocks.  An indie consultant must review the firm’s systems re:  U4 and U5 filings, and customer complaints, and firm must verify in writing it has adopted and implemented the consultant’s recommendations - certified by a firm officer.

Newbridge Securities Corporation allegedly facilitated the manipulative trading of stock of a company created as the result of a reverse merger:  (i) a group of control persons and promoters used accounts at the firm to execute pre-arranged in-house agency cross and wash transactions that were intended to generate volume and support or increase the price of the stock;  (ii) control persons were permitted to sell unregistered securities through firm accounts, and the sales were not made in compliance with any applicable exemption from registration;  (iii) firm failed to adequately supervise RRs who participated in the sales of unregistered securities, having failed:   

(i) to adequately ensure that RRs assigned to the accounts didn't engage in the sale of unregistered securities;  (ii) to ensure that RRs ascertained the origin of the securities;  (iii) to adequately supervise RRs who participated in the manipulative trading;  (iv) to detect improper cross, wash and other manipulative trading.

Newbridge's AML procedures, however, required the firm to investigate red flags indicating suspicious activity or trading, and to investigate and take appropriate steps, including limiting account activity, contacting a government agency or filing a SAR.  Of course, the firm failed to follow controls pertaining to manipulative trading, unregistered distributions and other suspicious activities.  Firm also allegedly had difficulty reporting customer complaints and amending Forms U4 or U5 for disclosable events.