A broker-dealer settled FINRA charges for failing to establish and maintain a supervisory system concerning (i) the qualitative suitability of products deemed high-risk and (ii) manipulative trading practices, specifically marking the close.
FINRA found firm supervisory deficiencies, including failing to provide "reasonable guidance, written procedures or training programs" regarding its regional managers' review of equity transactions and concentration in high-risk products. In addition, FINRA found the firm failed "to conduct any surveillance or conduct supervisory reviews for possible indicia of marking the close activity." ("Marking the close" concerns the "execution of transactions in a security at or near the end of the trading day in order to affect the security's closing price.")
To settle the charges, the broker-dealer agreed to a (i) censure, (ii) $100,000 fine and (iii) payment of restitution to an affected customer in the amount of $15,574.13 plus interest.
Originally published 4 May 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
