[ by Melanie Gretchen  and Howard Haykin]FINRA came down hard on investment bank, Rodman & Renshaw, and three former employees for alleged supervisory and other violations related to the interaction between the firm's research and investment banking functions.  All respondents - including an ex-CCO and 2 ex-analysts - signed AWCs to settle the FINRA charges. Backgrounds of Respondents. Rodman & Renshaw, LLC is a registered broker-dealer and a FINRA-member firm since 1986.  Based in New York, it is the broker-dealer subsidiary of Direct Markets Holdings Corp., and provides investment banking services, including Private Investments in Public Entities (PIPEs) and registered direct offerings, to public and private companies.  Rodman also provides research, sales and trading services to institutional investors. Ex-CCO William Iommi began in the securities industry in 1968 as a page on the floor of the NYSE.  Between 1968 and 1993, he worked at the NYSE and the Amex in a series of compliance and surveillance roles.  He left in 1993 for a variety of compliance roles with 3  FINRA-member firms, including 2-1/2 years with Sands Brothers in their London and New York offices.  He worked at Rodman from October 2oo3 until 6/1/12, when he voluntarily left the firm.  Throughout that time, he served as CCO;  he holds the following licenses:  8,14,24, 63,65 and 87.  Mr. Iommi is not currently employed in the securities industry. Analyst Alka Singh joined Rodman & Renshaw in January 2009 as a research analyst. Prior to that she had been employed in a similar role since 2004 with 3 Toronto-based, non-FINRA, financial firms.  Since Ms. Singh left Rodman on 3/1/11, she has worked as a metals and mining-focused research analyst for investment banks until March 2012,;and currently is not associated with a FINRA firm. Lewis Boreas Fan began in the securities industry in 2003 and through March 2009 worked for several FINRA-member firms in equity research.  He served 7 months as the U.S.-based CFO of a China-based manufacturer of biotechnology products, prior to joining Rodman & Renshaw in November 2009 as a research analyst focusing on Chinese public companies.  He left Rodman on 10/14/11, and currently is not associated with any FINRA-regulated entity. FINRA Findings and Allegations. From January 2008 through 3/15/12, the Firm allegedly failed to establish, maintain and enforce adequate supervisory and compliance controls and procedures - including WSPs and training - to address conflicts of interest arising from the interaction of its investment banking ("IB") and research functions, and to achieve compliance with NASD Rule 2711. Specifically, the firm allegedly had supervisory deficiencies related to:  (i) interactions between its IB and research functions - i.e., "information barrier procedures";  (ii) Watch and Restricted List Procedures;  (iii) Research Analyst Compensation Procedures;  and, (iv)  procedures re: adequate disclosure in research reports of its market-making status in the subject company's securities - i.e., Disclosure of Market Making Procedures. The impact of these supervisory deficiencies led to the following failures:

• failure to prevent research analysts from engaging in the solicitation of investment banking business in at least 2 instances;
• failure to prevent an individual engaged in investment banking activities from having influence or control over the compensatory evaluation of research analysts;
• compensation to a research analyst for his contribution to the Firm's investment banking business;
• failure to ensure that it adequately updated its Watch and Restricted Lists; and,
• failure to disclose the firm's market-making activities in securities of a company that was the subject of published research reports.

In addition, the Firm improperly published 9 research reports within 10 days following the date of an offering.  All told, the firm was charged with violating NASD Rules 3010,271 l(i), 2711(b)(1), 2711(d)(1), 2711(f)(1), 2711(h)(8) and 2110 and FINRA Rule 2010. During the Relevant Period, Rodman's ex-CCO Iommi failed to ensure that the Firm established, maintained and enforced a system, including written procedures and training, reasonably designed to achieve compliance with NASD Rule 2711 and to ensure that the Firm adequately updated its watch and restricted lists.  By virtue of the conduct set forth herein, Iommi violated NASD Rules 3010,271 l(i) and 2110 and FINRA Rule 2010. With regard to Fan's activities, the firm improperly compensated him for contributions to the firm's investment banking business.  Rodman also permitted its CEO to serve as a member of the firm's Research Analyst Compensation Committee while simultaneously being engaged in investment banking activities - without restricting his influence or control over research analysts' evaluations or compensation. FINRA Sanctions. Rodman & Renshaw LLC agreed to a $315K fine.  CCO Iommi agreed to a $15K fine and a 90-day suspension from serving in a principal capacity;  after that period, he must requalify as a general securities principal.  Fan agreed to a $10K fine and a 30-day suspension,  Alka Singh agreed to a $10K fine and a 6-month suspension - based on FINRA's finding that she allegedly attempted to arrange a concealed fee from a public company for which she provided research coverage. FINRA Investigation. FINRA's investigation was conducted by the Departments of Enforcement, Market Regulation and Member Regulation, and the Office of Fraud Detection and Market Intelligence. For further details, go to [FINRA News Release, 8/22/12] and    [FINRA AWC #20110260605].