Articles Posted in FINRA

Without denying or admitting to the allegations, the following financial representatives have turned in their Letter of Acceptance, Waiver, and Consent in the securities cases made against them by the Financial Industry Regulatory Authority:

New York Registered Rep. Fined $7,500 for Charging Excessive Commissions

Enver Rahman Alijaj has been suspended for two months from associating with any member of FINRA. He is accused of charging excessive commissions in equity security trades that took place in a member firm’s client account. The trades involved the buying of common stocks. The commissions for them ranged from 4.3% to 4.9% per trade.

FINRA is fining Directed Services LLC, ING Investment Advisors LLC, ING Financial Advisers LLC, ING America Equities Inc. and ING Financial Partners Inc. $1.2M for failing to keep or review million of email correspondence between ’04 and ’08. The five broker-dealers are affiliates of ING Groep NV (ING, INGA.AE).

According to ING Groep, the five ING units self-reported the problem to FINRA and that no customers were affected. In the wake of a thorough internal examination, the ING affiliates have taken significant steps to better its supervisory practices and email retention.

Per its findings, FINRA says the broker-dealers violated FINRA rules and federal provisions related to the retention of records when they did not properly configure the email accounts of staff to make sure correspondence was kept and reviewed. Also, because software wasn’t properly configured, close to 6 million emails that were marked for review at a supervisory level were not reviewed.

The Securities and Exchange Commission has approved rule amendments that provide greater clarity about the Financial Industry Regulatory Authority’s right to examine and copy the records and books of its member financial firms and associated persons. Per amended Rule 8210, staff and adjudicators are entitled to copy and inspect “data in the “possession, custody or control” of members and any others that the SRO has jurisdiction over. This amended rule becomes effective on February 25.

The amendments makes clear that the records and books are covered by rule 8210.The phrase “possession, custody or control” was added to including concept of the existing body of case law that defines these three terms they way that they are used in the Federal Rules of Civil Procedure’s Rule 34. The broker-dealer and associated persons relationship is also clarified so it is obvious that all aspects of that affiliation are subject to a Rule 8210 request.

The SEC has also approved amendments to FINRA arbitration codes. This will let arbitrators order member firms and associated persons to serve as witnesses or produce documents without being subject to the subpoena process. Additionally, the amendments added procedures for non-parties to contest subpoenas and for non-parties and parties to oppose arbitrator orders of production.

This month, the Financial Industry Regulatory Authority announced that it would be placing “significant resources” into monitoring high-frequency and algorithmic trading. The SRO said that following a number of market disruptions last year, it is worried about the way firms oversee these two systems.

In its yearly examination and regulatory priorities letter, FINRA spoke about how despite the fact that many high-frequency trading strategies are legitimate, others can be employed for purposes that are volatile, which is why the SRO wants to keep surveillance of this a priority and make sure that abusive trading doesn’t happen.

FINRA also said that it wants to take a closer look at alternative trading systems due to disclosure and operational concerns and high volume trading. It is examining firms that run ATS, as well as their affiliates. The SRO wants to figure out whether firms are accurately and consistently representing and disclosing different parts of their ATS operations to subscribers. Sweep letters were sent by FINRA to broker-dealers inquiring about ATSs in August.