July 20, 2015
On June 23, 2015, the SEC announced charges against Ireeco LLC and its successor, Ireeco Limited, for acting as unregistered brokers for more than 150 investors in the EB-5 Visa Program, in violation of Section 15(a) of the Exchange Act. The EB-5 Visa Program creates a way for foreign applicants…
July 20, 2015
FINRA Fines Morgan Stanley and Scottrade with Failure to Supervise Transfer of Funds to Third-Party Accounts
On June 19, 2015, FINRA fined Morgan Stanley Smith Barney, LLC (“MSSB”) and Scottrade, Inc. (“Scottrade”) for failing to implement reasonable supervisory systems to monitor the transmittal of customer funds to third-party accounts. Pursuant to NASD Conduct Rules 3012 and 3010, member firms must maintain supervisory control policies sufficient to…
June 11, 2015
On May 20, 2015, the SEC announced fraud charges against the co-owners of Manhattan-based broker-dealer, Arjent LLC and its UK-based affiliate, Arjent Limited.
September 10, 2014
On June 6, 2014, the SEC announced charges against Wedbush Securities Inc. and two of its officials for violating the SEC’s market access rule (Exchange Act Rule 15c3-5). Wedbush Securities, a Los Angeles-based market access provider, was consistently ranked as one of the five largest firms by trading volume on NASDAQ.
September 10, 2014
On June 5, 2014, FINRA announced an $800,000 fine against Goldman Sachs for "failing to have reasonably designed written policies and procedures in place to prevent trade-throughs of protected quotations" in Sigma X, its dark pool. Dark pools allow investors to trade stocks anonymously and report trade data after the deals are completed. The price at which shares are offered for sale in dark pools is not visible to anyone, even those participating in them. These alternative trading systems have been criticized recently for their lack of transparency and because the rise of dark pools has reduced trading on exchanges that publicly quote prices, which could lead to less efficient pricing.
July 29, 2014
FINRA has barred former equity trader Kenneth Ronald Allen from associating with any FINRA member for allegedly selling short Japanese stock based on inside information. FINRA alleged that Allen, a former equity trader with First New York Securities LLC, acted on a tip containing material, non-public information received from a corporate insider when he traded Japanese securities in September 2010.
November 21, 2013
On October 16, 2013, the SEC agreed to a settlement with Knight Capital Americas LLC (“Knight”) after charging Knight with violating Exchange Act Rule 15c3-5 (the “Rule”) for failing to adequately manage the risks connected with market access. As part of the settlement, Knight was censured and agreed to pay…
July 31, 2013
DC Circuit Court Remands Case to SEC for Reconsideration of Factors Mitigating Against Lifetime Ban of Registered Representative from Securities Industry
On June 11, 2013, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) ruled that the SEC abused its discretion in upholding a lifetime ban of registered representative John M. E. Saad from associating with any member firm by failing to adequately address all mitigating factors, and remanded the case to the SEC for reconsideration.
June 12, 2013
FINRA Fines Merrill Lynch $1.05 million and orders more than $323,000 in restitution for best execution violations in non-convertible preferred securities transactions
On April 16, 2013, FINRA announced that Merrill Lynch, the brokerage unit of Bank of America, will pay $1.05 million in fines and more than $323,000 in restitution for failure to provide best execution for trades involving non-convertible preferred securities executed on ML BondMarket, one of its proprietary order management systems, and for failure to have an adequate supervisory system and written supervisory procedures in place. Merrill’s Letter of Acceptance, Waiver and Consent, agreed to by FINRA on April 2, 2013, also includes other sanctions due to the violations occurring over nearly five years.