How FINRA Profits From Exploited Investors
As I've noted before, FINRA will allow a broker with a 20 year long record of infractions, misdeeds and fraudulent behavior to continue working in the industry, until finally, at a moment of their own choosing, they decide enough is enough- as if the first five years of churning and misrepresentation wasn't evidence enough that the person will never change his behavior, and will continue to prey on investors who will likely lose a substantial amount of their savings.
This time, we're going to highlight an entire firm, formed in 1998, with an eye opening rap sheet. What we're looking at here is the institutionalized enabling of white collar crime, going on for years. And the fines levied? Merely the cost of doing business, along with the utilities, toner cartridges and dental coverage.
Hang on to your hats- this is distilled from 30 pages from FINRA's own "Broker Check" website.
4/2010 - Failure to report trades: Fined $7500
5/2011- Caught backdating required records. Cease and Desist Order from the Securities and Exchange Commission. Ruling: CENSURED. $50,000 fine accepted in settlement.
3/2012 - Failure to report municipal bond trades properly. Fine: $20,000
5/2012 - Suspended by FINRA for failure to pay arbitration fines. Reinstated the next month after payment made. Some would call this "ransom."
11/2012 - Failure to report Municipal bond trades. Fine: $12,500
1/2014 - Churning; Relief requested: $100,000. No monetary relief awarded
10/2014 - Myriad of reporting and disclosures to client failures: CENSURED, SANCTIONED, FINED. $52,000
7/2015 - Churning; Misrepresentation; Omission of Facts; Failure to Supervise. Relief requested: $450,000 Awarded: $61,000
2/2016 - Too much to mention here: Penny stock irregularities, violation of the Bank Secrecy Act, failure of due diligence for Anti Money Laundering. Apparently, the Cayman Islands banking location wasn't enough of a clue. Fined $125,000
2/2016 - Dishonest and Unethical practices. CENSURED, Fined $50,000
3/2016 - Cease and Desist; banned from doing business in a U.S. state; Fined $30,000
5/2016 - Arbitration- Breach of Contract; Failure to Supervise; Negligence. Fined
6/2016 - Arbitration - Breach of Contract; Failure to Supervise; Negligence. Fined $80,000
8/2016 - Misrepresentation; Breach of Fiduciary Duty; Omission of Facts; Negligence. Fined $50,000
And yes, they're still operating, and permitted to do business, registered in the remaining 49 states. Now, you might think a real regulator would shut this bordello down, but let's face it: regulators want high salaries, pensions and health benefits just as badly as the regulated do, so I'm sure FINRA will keep this cow around so long as it keeps giving milk.
And not one minute longer.