A broker-dealer settled FINRA charges for failing to implement and maintain a sufficient supervisory system, which led to violations of FINRA Rule 3110 ("Supervision") and other securities regulations.
According to the Letter of Acceptance, Waiver and Consent, the broker-dealer violated requirements concerning (i) short-term trading, (ii) fair prices and commissions, and (iii) mutual fund sales. Between July 2013 and January 2017, the broker-dealer's representatives allegedly:
- engaged in unsuitable short-term trading in unit investment trusts and mutual fund Class A shares;
- executed transactions resulting in excessive commissions, since supervisors did not effectively review trade alerts for excessive commissions generated by the broker-dealer's automated trade surveillance system; and
- overcharged customers by failing to identify and apply available mutual fund breakpoint discounts for eligible customers.
The broker-dealer agreed to a censure and to pay a fine of $150,000.
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