(FINRA Case #2012030422902)
Legend Securities, Inc. (CRD #44952, New York, New York) – An OHO (Office of Hearing Officers) Decision became final in which the firm was fined a total of $475,000 and ordered to pay $884,436.24, plus interest, in restitution to customers. The sanctions were based on findings that the firm failed to have a reasonable supervisory system and WSPs (Written Supervisory Policies) to ensure it timely reported customer complaints, filed timely amendments to Uniform Application for Securities Industry Registration or Transfer (Form U4) and Uniform Termination Notice for Securities Industry Registration (Form U5), reviewed incoming and outgoing email communications, and considered heightened supervision for brokers with histories of misconduct.
The findings stated that the firm failed to report, or reported late, customer complaints to FINRA, and failed to file and timely file amendments to Forms U4 for seven of its registered representatives. The findings also stated that the firm improperly charged customers in 34,313 securities transactions. The confirmations sent to customers described the charges as “handling fees,” which was misleading and inaccurate. As a result, the firm willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-10.