Entries by Marianna Shafir Esq.

Regulatory Update: New York Broker-Dealer Fined $1.25 Million By SEC

Last month, the SEC issued a sizable $1.25 million fine against a New York-based broker-dealer. According to the SEC Order, the brokerage firm failed to retain audio files requested by SEC staff and did not maintain adequate books and records related to compensation, reimbursement, travel, entertainment, and gifts. The SEC determined that the brokerage firm deleted […]

Regulatory Update: Brokers Face Over $80,000 In Avoidable Fines

Recordkeeping & Supervision Last month, FINRA fined a firm $50,000 for failing to ensure that a non-registered, affiliated individual involved in the management of the firm’s business was properly registered as a principal. The findings stated that the firm was required to review or retain all business-related emails sent from or received through the email […]

Regulatory Update: SEC and FINRA Fine Brokerage Firm $6.1 Million for Reporting and Recordkeeping Violations

Last month, FINRA fined a clearing firm $5.3 million for anti-money laundering (AML) failures as well as recordkeeping, financial, and operation violations involving penny stock shares. Despite clearing and settling billions of penny stock shares dating back to 2012, FINRA discovered that the clearing firm failed to institute an AML program to detect and report […]

FCA Fines Insider Dealers £1.69 Million

Mobile Phone Communications at Center of Conspiracy A judge has issued confiscation orders totaling £1.69m against two recently-convicted insider dealers. These confiscation orders follow an FCA prosecution in which a former investment banker and a chartered accountant were convicted in the largest ever FCA insider dealing investigation. Investment banker Martyn Dodgson and chartered accountant Andrew […]

Regulatory Updates: Brokers Fined and Barred for Unsupervised Communications

In April, FINRA continued to focus on firms’ recordkeeping and supervision. FINRA continues to focus on communications sent over channels which firms cannot or are not archiving. FINRA also continues to closely monitor and penalize high-risk firms and brokers. Firms and Individuals Sanctioned FINRA fined both a firm and the firm’s chief executive officer (CEO): […]

Text Messages Evidence of Fraudulent Intent in Centra Crypto Scheme

Cryptocurrency startup Centra Tech, Inc. faces federal criminal and civil charges related to the company’s $32 million initial coin offering (ICO) in September. The Securities and Exchange Commission (SEC) arrested the three owners of Centra Tech under fraud charges, stating in their press release that “text messages among the defendants reveal their fraudulent intent.” According […]

Electronic Communications Tops FINRA Enforcement Issues in 2017

Financial Industry Regulatory Authority (FINRA) restitution more than doubled in 2017, according to Eversheds Sutherland’s annual analysis of reported disciplinary actions. FINRA reported restitution of approximately $66 million in 2017, an increase of 136% from the $28 million in restitution reported in 2016. In 2017 FINRA fines amounted to $73 million, a 58 percent decrease […]

FCA Regulatory Priorities for 2018

On April 9, 2018, the UK’s Financial Conduct Authority (FCA) published its Business Plan for 2018/19 which highlights the key priorities for this year. This year’s priorities reflect the resources the FCA needs to prepare for withdrawal from the European Union (EU).  Brexit is a key priority for the FCA as it seeks a smooth […]

Regulatory Updates: Firm fined $1.3 million for supervision failures

The SEC and FINRA recently fined a brokerage firm $1.3 million for failing to supervise suspicious penny stock transactions. Last month, FINRA fined a firm $550,000 for “failing to have adequate supervisory and anti-money laundering (AML) programs tailored to detect ‘red flags’ or suspicious activity connected to its sale of low-priced securities”. Further, the SEC […]

Regulatory Update: Former Equifax CIO Charged with Insider Trading – Texting at the Center of the Charges

The text message from the former Equifax CIO was a red flag: “Sounds bad. We may be the one breached.” Federal prosecutors charged a former Equifax chief information officer (CIO) with insider trading, for selling nearly $1 million in company stock before the public disclosure of the Equifax data breach. The former CIO of a U.S. […]