A broker-dealer and a registered representative settled FINRA charges for failing to establish and enforce procedures to record and review phone calls between the firm and existing or potential customers.
According to FINRA, the firm did not establish, maintain and enforce sufficient written procedures to ensure compliance with FINRA Rule 3170 ("Tape Recording of Registered Persons by Certain Firms"). Even after the firm made some efforts to remediate the taping failure, it failed to ensure that telephone conversations were reviewed.
To settle the charges, the representative agreed to a (i) 30-day suspension and (ii) $10,000 fine. Separately, the firm agreed to (i) a censure, (ii) a $35,000 fine - not including the fine to the representative - and (iii) an undertaking to fix several supervisory procedures.
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