FINRA has censured and imposed a $250,000 fine upon City National Securities, Inc., a registered broker-dealer located in Beverly Hills, California.
With neither admitting nor denying the findings contained in the FINRA AWC (Acceptance, Waiver and Consent), the firm consented to findings that it failed to supervise certain registered representatives to ensure their compliance with FINRA rules involving outside business activities, private securities transactions and outside accounts.
FINRA found the firm’s written supervisory procedures (WSPs) did not include procedures as to how and to whom employees’ outside business activity requests should be submitted for evaluation. Nor did the firm update its WSPs to reflect the requirements of the Supplemental Material of FINRA Rule 3270 relating to member firms’ obligations to receive an outside business activity notice.
FINRA further found the firm’s WSPs failed to cover aspects of compliance with NASD Rule 3050, including a representative’s obligation to provide written disclosure to the firm prior to opening an outside brokerage account.
In my work as a FINRA defense lawyer, I have seen many FINRA investigations and enforcement actions involving financial advisor outside business activities, brokers involved in private securities transactions away from the firm (selling away) and the maintenance of outside brokerage accounts unbeknownst to the firm. FINRA takes these issues very seriously and will not hesitate to fine and suspend those brokers who violate these FINRA rules.
If you have been contacted by FINRA for engaging in an outside business activity without proper disclosure to your firm, or are under FINRA investigation for engaging in private securities transactions away from your firm, it is critical that you engage the services of an experienced and seasoned FINRA defense lawyer to ensure your rights are protected.
David Chase, a FINRA defense lawyer and former SEC enforcement attorney located in Fort Lauderdale, Florida, represents nationwide stock brokers, financial advisors and other securities professionals in FINRA inquiries and SEC investigations and securities regulatory enforcement actions. Call toll-free to speak with FINRA defense lawyer David Chase for a confidential consultation: (800) 760-0912 or contact him via email at david@davidchaselaw.com.
