FAQ - How Are Microcap Stocks Different From Other Stocks - South Florida Litigation and Arbitration Attorney
How Are Microcap Stocks Different From Other Stocks?
How Are Microcap Stocks Different From Other Stocks?
FAQ - Where Do Microcap Stocks Trade?
What Is a Microcap Stock?
What is a Boiler Room Scheme?
Securities and Exchange Commission v. Keith Houlihan, No. 9:18-cv-80585 (S.D. Fla. filed May 4, 2018)
Securities and Exchange Commission v. Diane J. Harrison, et al., Civil Action No. 18-cv-01003 (M.D. Fla., filed April 25, 2018)
Securities and Exchange Commission v. Rudden, et al., No. 18-cv-01842 (D. Colo. filed July 19, 2018)
Securities and Exchange Commission v. John C. Maccoll, No. 2:18-cv-12473-SFC-DRG (E.D. Michigan filed August 9, 2018)
Securities and Exchange Commission v. Chad Anthony Lewis, No. 18-cv-61869 (S.D. Fla. filed August 13, 2018)
Kelly Marvin Barnett (CRD #4127608, Sarasota, Florida):
Peter David Holler (CRD #838897, Bristol, Tennessee):
Brian John Hussey Jr. (CRD #4640067, Zephyrhills, Florida)
As a Shareholder of a Corporation or Member of a Limited Liability Company, is Your Claim Direct or Derivative.
Do anti-fraud provisions apply?
FINRA recently announced that on or about May 21, 2018 Integrated Trading and Investments, Inc. executed an Acceptance, Waiver and Consent in which the firm was censured and fined $5,000. A lower fine was imposed after considering, among other things, the firm's revenue and financial resources. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to maintain and preserve certain business-related emails in a non-erasable, non-rewritable format, also known as WORM (write once, read many) format. The findings stated that the firm allowed its registered representatives to use personal email accounts to conduct their securities business and preserved business-related emails using electronic storage media (ESM). Until July 2013, the firm's representatives were required to forward their business-related emails from their personal email accounts to the personal email address of the firm's President/Chief Compliance Officer (CCO) for storage. These emails, along with any other business-related emails sent from or received by the CCO's personal email address were not stored in WORM format. Beginning in July 2013, the firm's representatives were required to forward business-related emails conducted in their personal email accounts to firm email addresses for storage. The firm's representatives did not always follow this requirement. As a result, certain of their business-related emails were not maintained and preserved in WORM format. The findings also stated that the firm did not use an automated system for the review and preservation of all business-related emails. Instead, it relied on an "honor system" for registered representatives to manually forward business-related emails, including those with customers, from their personal email accounts to the firm's CCO (until July 2013) and to business email addresses assigned by the firm (beginning in July 2013). As a result, the firm's compliance with its review and preservation obligations depended on its representatives' compliance with this requirement. The firm, however, had no supervisory system or procedures to ensure that its representatives complied with this requirement. The findings also included that because of this deficiency in the firm's system, business-related emails sent from or received by the personal email accounts of the firm's representatives that were not forwarded escaped supervisory review. For example, business-related emails using personal email accounts were not forwarded by three registered representatives between April 2012 and July 2013, and by another representative between August 2013 and January 2014. The firm was unable to evidence any review of these emails. FINRA found that between January 2012 and July 2013, the firm did not require the review by another registered principal of emails sent or received by the firm's CCO and did not otherwise establish a reasonable system for the review of his emails. As a result, the CCO's emails were not reviewed by another registered principal. FINRA also found that the firm failed to implement and maintain a reasonably
FINRA recently announced that on May 3, 2018 Cambridge Investment Research, Inc. executed an Acceptance, Waiver and Consent in which the firm was censured and fined $150,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a reasonably-designed supervisory system and procedures regarding redemptions of variable annuities and leveraged, inverse and inverse-leveraged ETFs (non-traditional ETFs). The findings stated that on approximately 100 occasions, the firm's customers redeemed variable annuities and transferred the proceeds to an advisory account. The firm's associated persons were involved with and recommended some of those transactions. The firm did not systematically supervise or record those redemptions or have written procedures for doing so, nor did the firm ascertain which of those transactions were recommended by the firm's associated persons and were thus subject to FINRA's suitability requirements. The firm's supervisory system and WSPs were not reasonably designed to comply with applicable supervision and recordkeeping requirements with respect to redemptions of variable annuities, and the firm did not record those transactions. The findings also stated that 84 firm registered representatives traded non-traditional ETFs in retail customer accounts. These registered representatives executed 4,773 transactions totaling approximately $127 million. The firm established WSPs for non-traditional ETFs that required registered representatives who wanted to trade non-traditional ETFs to complete a 45-minute training session and sign a "Leveraged/Inverse ETF Rep/Advisor Attestation Form." The attestation form required representatives to make several representations before executing a nontraditional ETF transaction. The firm failed to enforce its WSPs regarding non-traditional ETFs in several respects. First, the firm allowed representatives to execute non-traditional ETF trades before signing the attestation form. All 84 representatives who executed nontraditional ETF transactions executed at least one such transaction before signing the attestation form. Second, the firm allowed customers to purchase non-traditional ETFs before submitting the required disclosure form. The findings also included that the firm did not establish an adequate supervisory system to effectively monitor holding periods for non-traditional ETFs. The firm's procedures required the compliance department to review customer accounts that held non-traditional ETF positions and identify any accounts that were holding these positions for more than 10 days and, if necessary, follow up with the responsible registered representative. The firm, however, failed to enforce these procedures. The firm's failure to adequately monitor customers' non-traditional holding periods resulted in customers holding non-traditional ETF positions for lengthy periods of time. There were numerous non-traditional ETF positions that were sold by the firm's customers that were held for longer than seven days. (FINRA Case #2016048934301)
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