1. RR's Issues with his Personal Brokerage Account.
2. Principal Fails on Suspicious Transactions Run Through Firm by Foreign B/D's.
3. Interdealer Broker's 'Indiscreet Communications' Cost Him $200K.
4. Principal Passed on Required Reviews of his Customer Correspondence.
5. For complete details, click onto:  [FINRA Disciplinary Action for December]

    1.  RR's Personal Brokerage Account Issues.   B. Abbott III, an RR in Mount Dora, FL, agreed to a $5K fine and 1-year suspension to settle FINRA charges related to his personal trading.  It's alleged he:

• maintained personal margin accounts at his member firm and met initial margin calls in his personal margin accounts by liquidating the position that created the margin call.
• placed an unauthorized short sell order of a company’s stock, costing $90K in a customer’s account, and the trade was marked "unsolicited" although the customer had not authorized a short sale of the stock or any other specific transaction.
  
  • said he made an error and meant to enter an order for a short sale for a smaller number of shares, but the customer did not authorize this trade either;  firm XCL'd transaction at $20K loss, which firm absorbed. 
• in connection with joint accounts he held with his relative at the firm, Abbott knowingly entered information that overstated his net worth and annual income on N/A forms - supposedly to qualify for trading activity the firm otherwise would not have allowed.   (FINRA Case #2008015676801)

    2.  Principal Fails on Suspicious Transactions Run Through Firm by Foreign B/D's.   M. Diemer, a Principal in Glencoe, MO, agreed to be barred from the industry to settle FINRA charges related to activities as his member firm’s Anti-Money Laundering Compliance Officer (AMLCO).  It's alleged he: 

• failed to implement adequate pols & procedures for detecting and reporting of suspicious transactions.
• as AMLCO, failed to detect, investigate and/or file SARs as appropriate, on occasions when “red flags” of suspicious activity were present. 

It should be noted, his broker-dealer is an introducing firm that maintains “piggyback” arrangements with foreign B/D's and executes their transactions with a clearing firm.  Many of the suspicious activities noted by FINRA occurred in accounts of these foreign B/D's Diemer failed to appear for a FINRA on-the-record interview, which effectively sealed his fate. (FINRA Case #2009016254302)

    3.  RR's 'Indiscreet Communications' over Competitive Broker Fee Rates.   T. Eddy, an RR in New York, NY, agreed to a $200K fine and a 1-month suspension to settle FINRA charged related to his communications with other inter-dealer brokers about CDS instruments - specifically, about dealers’ brokerage fee rate reduction proposals.  It's alleged that these communications generally arose after individual CDS dealers seeking to renegotiate their CDS brokerage fees, transmitted schedules of their proposed brokerage rate reductions to multiple interdealer brokers.  While many of the communications involved one-to-one discussions between Eddy and personnel from other CDS interdealer brokerage firms, some communications referred to similar types of interactions about the schedules involving additional inter-dealer brokerage firms.  (FINRA Case #2006005158310) 

    4.  Principal Passed on Required Reviews of his Customer Correspondence.  R. Hess, a Principl in Omaha, NE, agreed to a $5K fine and a 10-day suspension to settle FINRA charges related to his outside correspondence with customers.  For whatever reason - defiance, perhaps - it's alleged this Princiapl didn't submit any of his correspondence to/from public customers for a principal's review prior to mailing, as he and other registered persons were required to do.  He further failed to not submit, as required, a weekly correspondence log, along with copies of the correspondence, to Compliance.  

[C-I Note:  The need to "Supervise the Supervisor."]  (FINRA Case #2007008310201)