[ by Melanie Gretchen ] A registered principal, with Miami-based LaFise Securities, agreed to settle FINRA charges she instructed an RR not to execute transactions that various customers had authorized so as to limit their losses on short U.S. Treasuries positions. FINRA Findings and Allegations. An RR reporting to Marcela Zamora Erana serviced 5 customer accounts on a discretionary basis.  All 5 employed a similar trading strategy of shoring U.S. Treasuries on margin.  However, in late 2008, the price of Treasuries increased, rather than fall - and for a time, the customers agreed to continue shorting U.S. Treasuries. Yet, as the price of the Treasuries increased and margin calls occurred more frequently, they became concerned and instructed the RR to monitor their positions, and to to cover their short position if Treasuries certain particular prices, which would trigger the RR to purchase the Treasuries in their accounts and cover their respective short positions - thus limiting their losses. When U.S. Treasuries increased through the respective agreed-upon trigger prices for the customers, and the RR prepared to cover the shorts, the rep was instructed by his supervisor, Erana, not to do so. FINRA Sanctions. For her actions, Erana agreed to a $5K fine and 1-month suspension.

[C-I Note: It's not enough anymore to get a good RR.  You also need a good RR supervisor.]    [FINRA Disciplinary Action for January 2012].

For more details, go to [FINRA AWC #2009016028501].