FINRA gave a "slap on the wrist" to a Registered Principal with Jesup Lamont Securities who seemed to do little if anything while a broker under his supervision 'abused' a customer's account.  Robert Joseph Oftring of Worcester, MA, agreed to a $5K fine and a 6-month suspension for committing what appeared to be "egregious lapses" of supervisory duties. FINRA notes that Oftring "failed to take appropriate action to reasonably supervise the [registered rep] to detect and prevent her violations and achieve compliance with applicable rules in connection with a customer’s account." Furthermore, "Oftring, among other things, failed to take reasonable steps to follow up on certain indications of potential misconduct that should have alerted him to the representative’s violations."  FINRA identified these specific abuses:  

• the representative engaged in excessive, short-term trading in the customer’s account, which resulted in losses of approximately $60,000;
• the account was subject to frequent margin calls and transfers from a third-party account to satisfy margin calls in the account.
• once, the representative transferred funds back to the third-party account by forging the customer’s signature on an LOA.
• Oftring was aware of the active trading in the customer’s account and knew that the representative was effecting securities transactions in the account while it had a negative balance, but he never stopped the representative from trading and never contacted the customer to discuss the activity.
• Oftring was aware of and approved the transfer of funds between the customer’s account and the third-party account, and accepted the representative’s explanation for the same without contacting the customers involved in the transfers.

Oftring continues to serve his suspension through 11/1/11.  This is FINRA Case #2009019996501.   [Disciplinary Actions for June 2011]