ARTICLE
22 January 2020

Broker-Dealer Disciplined For Lax Oversight Of Payments From Customer Accounts

CW
Cadwalader, Wickersham & Taft LLP

Contributor

Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
A broker-dealer settled FINRA charges for failing to take reasonable measures to prevent fraudulent wire transfers from customers' accounts.
United States Finance and Banking

A broker-dealer settled FINRA charges for failing to take reasonable measures to prevent fraudulent wire transfers from customers' accounts.

FINRA alleged that two of its registered representatives stole customer funds by redirecting wire transfers and checks from customers' accounts. FINRA charged the broker-dealer with failing to take reasonable measures that might have prevented these fraudulent transfers. Specifically, the broker-dealer failed to (i) enforce policies and procedures for third-party payments or (ii) respond to red flags in a reasonable manner. FINRA noted that the representatives acted independently of one another.

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) fine of $400,000.

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.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More