FINRA’s March 2015 Disciplinary Actions Part I

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FINRA’s March 2015 Disciplinary Actions Part I

Bulltick, LLC of Miami, Florida submitted an AWC in which the firm was censured and fined $20,000. Despite not admitting or denying FINRA’s findings, Bulltick consented to the sanctions and to the entry of findings that it failed to adequately implement and enforce its written supervisory procedures on reporting TRACE-eligible securities, pursuant to a Uniform Service Bureau/Executing Broker Agreement executed by the firm and its affiliate that required Bulltick to report the affiliate’s transactions in TRACE-eligible securities to TRACE. Subsequently, Bulltick failed to report the right contra-party identifier for transactions in TRACE-eligible securities of the affiliate to TRACE, and Bulltick also reported transactions in TRACE-eligible securities to TRACE that it did not have to report.

Transamerica Financial Advisors, Inc. of St. Petersburg, Florida submitted an AWC in which the firm was censured and fined $50,000. Despite not admitting or denying FINRA’s findings, Transamerica consented to the sanctions and to the entry of findings that it filed with FINRA an inaccurate Form U5 on behalf of a former registered representative who failed to disclose that she had been charged with a felony prior to her termination. Transamerica knew that the representative had been charged with the felony while she was employed and registered with the firm. Transamerica also filed with FINRA an inaccurate and misleading Amended Form U5 for the representative that claimed she had not been charged with a felony before her termination and that she had not disclosed her arrest at the time of her resignation.

Worth Financial Group, Inc. of Dallas, Texas submitted an AWC in which the firm was censured and fined $10,000. Without admitting or denying FINRA’s findings, Worth consented to the sanctions and to the entry of findings that it failed to establish adequate supervisory systems or written supervisory procedures to monitor sales of life settlement investments by the firm’s registered representatives and non-associated individuals for whom the firm received override commissions. Worth failed to have any supervisory systems or written supervisory procedures in effect to discover if the states in which its licensees sold life settlements deemed them to be securities or required individuals who sold life settlements to have a specific registration or license. Worth also failed to have supervisory systems or written supervisory procedures in effect to make sure that registered representatives were performing reasonable-basis and customer-specific suitability analyses and disclosing both the risks and rewards associated with investing in life settlements. Worth further did not have a training program in effect to make sure that registered representatives understood the important features, risks, and suitability of life settlements.

Naveen K. Bhagwani of West Palm Beach, Florida submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, he consented to FINRA’s sanction and to the entry of findings that he engaged in unauthorized trading in customers’ non-discretionary accounts without the knowledge, authorization, or consent of the clients or anyone with trading power over the accounts. Bhagwani excessively traded, made quantitatively unsuitable investments, and churned customer accounts with the motive of creating commissions for himself and his member firm. He also misrepresented material facts to clients and created and forged customers’ signatures on a letter that authorized the transfer of their funds without their knowledge or consent.

Michael Vincent Borja of Miami, Florida 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 45 days. Despite not admitting or denying the findings, Borja consented to the sanctions and to the entry of findings that he engaged in wire transfer requests, from an imposter posing as a customer, without first obtaining verbal confirmation from the customer, which was against his member firm’s policies and procedures. Borja falsely represented in his firm’s records that he verbally confirmed wire requests with the customer and also gave false reasons for the customer’s transfer instructions. He additionally caused his firm to keep false books and records regarding the wire transfer requests.

William David Crain of Little Rock, Arkansas 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. Crain did not admit or deny the findings but consented to the sanctions and to the entry of findings that he exercised discretion in a customer’s account without first obtaining written authorization to do so. The customer had given Crain discretionary trading authority in an invest-advisory agreement. Yet, Crain continued to exercise trading authority in the account after discovering the customer had died and the subsequent expiration of his discretionary trading authority. Crain executed trades with the knowledge and implicit consent of the surviving spouse, who was the account’s sole beneficiary, but she had not given Crain written discretionary authority.

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