A firm settled FINRA charges for failing to ensure that its sales and purchases were as fair and favorable as possible to its customers.
In a Letter of Acceptance, Waiver and Consent, FINRA stated that the company purchased and sold corporate bonds at prices that were upwards of eight percent away from the relevant market, in violation of FINRA Rules 5310 ("Best Execution and Interpositioning") and 2010 ("Standards of Commercial Honor and Principles of Trade"). In addition, FINRA found that the company sold municipal securities to customers at prices that were approximately 40 percent away from the relevant market, in violation of MSRB Rules G-30 ("Prices and Commissions") and G-17 ("Conduct of Municipal Securities and Municipal Advisory Activities"). FINRA also determined that, in violation of MSRB Rules G-18 ("Best Execution") and G-27 ("Supervision"), and FINRA Rules 3110 ("Supervision") and 2010, the firm failed to create and maintain a supervisory system adequately designed to achieve compliance with the aforementioned rules.
To settle the charges, the firm agreed to (i) a censure, (ii) an $80,000 fine, (iii) payment of $43,912.89 plus interest in restitution to the affected customers and (iv) an undertaking to revise its relevant written policies and procedures.
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