The Financial Industry Regulatory Authority is fining Securities America and Triad Advisors $625,000 and $650,000, respectively, for not properly supervising the way consolidated reporting systems were used. Triad must also pay $375,00 in restitution. Even though they are settling, the two firms are not denying or admitting to wrongdoing.
The self-regulatory organization said this inadequate supervision led to statements containing inaccurate valuations that were sent to customers. The two firms are also accused of disobeying securities laws by not keeping appropriate consolidated reports.
A consolidated report is a document that includes information about the bulk of a customer’s financial holdings. The report is a supplement to official account statements.
According to FINRA, while Securities America and Triad Advisors had a consolidated reporting system that allowed a representative to generate these reports, for over two years they did not supervise the hundreds of brokers who were authorized to do this. This permitted the generation and dissemination to customers consolidated reports that were inaccurate and false and contained inflated investment values, fictitious assets, and other inaccuracies. As FINRA Enforcement Chief and EVP Brad Bennett has noted, consolidated reports can be used to hide theft and fraud without proper supervision.
At Shepherd Smith Edwards and Kantas, LTD LLP reports, our securities fraud lawyers are here to help investors that have suffered losses because of broker or firm negligence or misconduct to get their money back. Contact our securities law firm today.
Finra Fines Triad Advisors, Securities America for Inaccurate Consolidated Reports, The Wall Street Journal, March 12, 2014
FINRA Fines Triad Advisors and Securities America a Total of $1.2 Million for Consolidated Reporting Violations, FINRA, March 12, 2014
Triad Advisors Action (PDF)
Securities America Question (PDF)
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