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SEC, FINRA Fine Merrill Lynch

Following on the heels of Merrill Lynch's agreement yesterday to pay $415 million to settle claims made by the SEC, the commission and FINRA fined the firm an additional $15 million in another action brought by the SEC and a third brought by FINRA. In an announcement yesterday, the SEC stated that Merrill Lynch agreed to pay a $10 million penalty to settle claims that it made misleading statements in materials provided to retail investors for structured notes linked to a proprietary volatility index. These materials highlighted the commissions that were charged and the annual fee. However, they failed to disclose a quarterly cost of 1.5% that was tied to the value of the volatility index. The notes were issued by Bank of America. Merrill Lynch had "principal responsibility for drafting and reviewing the retail pricing supplements," the SEC said. FINRA stated that it also fined the firm $5 million for “negligent disclosure failures” in the sale of [...]

By |June 24th, 2016|FINRA, SEC|
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FINRA Suspends Former LPL Broker

FINRA has suspended former LPL Financial broker and supervisor Peter Neuberg for six months and has fined him $15,000 after failing to reasonably supervise a registered representative, according to the regulatory agency. Neuberg ceased regularly reviewing paperwork prepared by the representative, who altered documents pertaining to customer accounts, including reusing signatures from previously completed forms, FINRA says.Neuberg agreed to the suspension and fine without admitting or denying the findings.The supervisory failures occurred between September 2011 and June 2012, according to FINRA. Neuberg was registered with LPL in Parsippany, New Jersey from November 2000 to September 2012 before registering at BCG Securities, Inc., according to FINRA's BrokerCheck.LPL terminated him because of the allegations that he violated the firm's signature policy.The representative Neuberg was supposed to be supervising falsified documents to expedite transactions to accommodate customers, FINRA says. He failed to make a reasonable inquiry or conduct a review of the files she handled, even after she asked whether she was allowed [...]

By |June 22nd, 2016|Broker Check, FINRA, Press Releases & News|
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FINRA Bars Broker Over Private Securities Transactions

Former broker Brian Smit entered a Letter of Acceptance, Waiver, and Consent, accepting a bar from being associated with any FINRA member in any capacity over engaging in unapproved private securities transaction in violation of his firm's policy. Smit entered the securities industry in April 2010, when he became associated with LPL Financial, LLC and registered with FINRA as a General Securities Representative. On August 24, 2015, LPL filed a Uniform Termination Notice for Securities Industry Registration, also known as a Form U-5, disclosing that Smit's association with LPL had been terminated on August 3, 2015 as a result of participating in unapproved private securities transactions in violation of LPL's policy. In February 2016, FINRA requested that Smit appear and provide on-the-record testimony related to allegations he participated in an unapproved private securities transaction. Smit refused to provide said testimony, violating FINA Rules 8210 and 2010. The nature of Smit's private transactions is presently unclear. According to [...]

By |June 14th, 2016|FINRA, Press Releases & News|
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FINRA Bars Broker For Borrowing Client Funds

FINRA has barred Christopher Tolmacs of Portage, Michigan, alleging that the broker borrowed client funds.  The providing of loans or selling of promissory notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions, a practice called "selling away." According to FINRA, Tolmacs consented sanctions in the form of a permanent bar because he failed to provide documents and information requested by FINRA during the course their investigation into allegations that he borrowed funds from multiple customers. At this time it unclear the nature and scope of Tolmacs’ outside business activities and private securities transactions.  However, according to Tolmacs’ public records his outside business activities includes Harbinger Financial Group, Inc., listed as an insurance agency, and Harbinger Asset Management, Inc., which is listed as a registered investment advisory firm.  Many times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices. In addition, Tolmacs has been [...]

By |June 9th, 2016|FINRA, Press Releases & News|
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