FINRA December 2015 Disciplinary Actions: Part II

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FINRA December 2015 Disciplinary Actions: Part II

Wunderlich Securities, Inc. (Memphis, TN) submitted an AWC in which the firm was censured and fined $50,000. FINRA found that it failed to establish, maintain, and enforce an adequate supervisory system and written procedures regarding the preparation and dissemination of consolidated reports. The findings stated that although the firm’s WSPs expressly permitted the preparation and dissemination of consolidated reports, they did not adequately address how the firm would supervise the use of consolidated reports. The firm also failed to establish, maintain, and enforce an adequate supervisory system or written procedures to ensure the accuracy of any valuation information that was provided by a registered representative in a consolidated report and mandating the inclusion in consolidated reports of specific disclosures regarding the source and accuracy of any valuation information that was provided by a registered representative. In addition, the firm failed to establish, maintain, and enforce an adequate supervisory system and written procedures to ensure that supervisory reviews of consolidated reports were performed and documented by the applicable supervisors and readily available for review by the firm or any regulatory authority. The findings also stated that the firm failed to establish, maintain, and enforce an adequate supervisory system and written procedures for the supervision of sales of nontraditional ETFs. Although the firm permitted its registered representatives to recommend nontraditional ETFs, the firm’s WSPs did not adequately address the particular characteristics and risks associated with nontraditional ETFs. In addition, the firm did not utilize an effective system or report to enable its supervisors to readily identify instances in which a customer might be holding a position in a nontraditional ETF for an extended period of time. The firm also failed to provide formal training to its registered representatives and supervisory personnel regarding the unique characteristics and risks of nontraditional ETFs.

Andrew Martin Abern (Miami, FL) submitted an AWC in which he was barred from association with any FINRA member in any capacity. FINRA found that he failed to appear at a FINRA-requested on-the-record interview to answer questions relating to recommendations he made to customers regarding the purchase and sale of variable annuities.

Garrett Andrew Ahrens (Lafayette, LA) submitted an AWC in which he was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for one month. FINRA found that he prepared consolidated reports for customers that inaccurately reflected the current value of investments and the performance of investments, including private placements and non-traded real estate investment trusts (REITs). The findings stated that the consolidated reports were false and misleading because the current values of the investments provided were shown at a significantly higher price than their actual values. The suspension was in effect from October 12, 2015, through November 11, 2015.

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