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Articles Posted in FINRA Disciplinary Actions

Citigroup Global Markets Inc. (CRD #7059, New York, New York) was fined $160,000 by FINRA for certain findings. According to the May 2020 FINRA Disciplinary Actions report, CitiGroup Global Markets allegedly failed to report certain financial transactions called Reportable Order Events (ROEs) to the Order Audit Trail System (OATS™). The firm was also held accountable for failing to establish and maintain a supervisory system and failing to conduct supervisory reviews in regards to reports submitted to OATS. 

These may seem like irrelevant technicalities. These oversights, however, do affect investors. Banks, brokers, and investment firms are responsible for not only protecting your money but they are also responsible for remaining compliant with the requirements of the SEC, FINRA, and all other regulatory institutions. 

If you lost money with Citigroup Global Markets or any broker or brokerage firm, call us immediately to discuss your situation.  We are here to attempt to recover your investment losses.  NO RECOVERY, NO FEE!  Costs are additional.

Dash Financial Technologies LLC (CRD #104031, Chicago, Illinois) was fined $90,000 and censured. This was the result of them allegedly misunderstanding and misapplying certain codes and direct orders. Dash Financial Technologies LLC is a Capital Markets technology firm based in New York.

FINRA findings found that Dash Financial Technologies LLC allegedly:

  •  “transmitted inaccurate Reportable Order Events (ROEs) to the Order Audit Trail System (OATS™)

Citigroup Global Markets Inc. (CRD #7059, New York, New York) was fined $225,000 and “required to revise its supervisory system and WSPs” according to FINRA. This fine was brought down upon the firm because they allegedly conducted a short sale without having borrowed a security or documented compliance for the sale. 

The Citigroup Global Markets Inc. had multiple counts of alleged instances of oversight including that they:

  • “Failed to establish, maintain and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order in a covered security

Wells Fargo Advisors, LLC aka Wells Fargo Clearing Services, LLC (CRD #19616, St. Louis, Missouri) was fined $175,000 and censured due to an alleged lack of oversight and excessive trading on clients accounts. 

FINRA findings found that the firm was allegedly “failed to reasonably supervise a former registered representative who excessively traded equity positions in accounts belonging to an elderly customer” (FINRA March 2020 Disciplinary Actions). An elderly lady’s investment resulted in over $300,000 in commissions and other fees. Although the firm’s software did flag the activity, the firm did not reasonably address the situation. The client filed a complaint and the firm paid $1,000,000 in restitution to her. 

If you lost money with Wells Fargo Advisors, LLC (Wells Fargo Clearing Services) or any broker or brokerage firm, call us immediately to discuss your situation.  We are here to attempt to recover your investment losses. NO RECOVERY, NO FEE! Costs are additional.

Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691, New York, New York) was fined $150,000. Although the firm did not admit or deny the findings of FINRA, they did consent to the sanctions.

The findings found that the firm allegedly:

  • “Executed municipal securities transactions with customers in an amount below an issue’s minimum denomination without an exception

Jorge A. Reyes (CRD #4256834, Miami, Florida) was fined $4,009,000 plus interest, in restitution to clients and was barred from association with any FINRA member in all capacities. This FINRA sanction was based on the alleged findings that Reyes defrauded customers a violation of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 and Sections 17(a)(2) and (a)(3) of the Securities Act of 1933. 

The findings found that Reyes allegedly:

On December 31, 2019, the firm Wilson-Davis & Co., Inc., and brokers Byron Bert Barkley, and James C. Snow Jr were fined $1,100,000, and had to pay disgorgement in the amount of $51,624, prejudgment interest and are required to retain an independent consultant to recommend changes to its WSPs. There were additional fines, sanctions, and suspensions.

The sanctions were based on findings that the firm was engaged in short selling which is a violation of Rule 203(b)(1) of Regulation SHO of the Securities Exchange Act of 1934 (Reg SHO).  ( FINRA Disciplinary Actions March 2020).”

Barkley and Snow were allegedly involved in various violations and activities including: 

Samuel Lek, former Chief Executive Officer of Lek Securities Corporation (Lek Securities) (CRD #1642936)– An AWC (Accept, Waiver & Consent) was issued in which Lek was permanently barred from the securities industry in all capacities. Lek was fined $900,000 for violating FINRA and Exchange supervisory rules, specifically Rule 15c3-5 of the Securities Exchange Act of 1934 (Market Access Rule), among other infringements. Action was taken by FINRA, the NASDAQ Stock Market, the New York Stock Exchange, Cboe Global Markets, and certain of their various affiliated Exchanges. The fine was shared proportionally between FINRA and the exchanges. 

Lek Securities was providing market access to foreign traders for several years while they would perform manipulating trading on US exchanges including activities such as spoofing, layer, and cross-product manipulation. Samuel Lek himself allegedly assisted with these tradings through a sub-accounting held and Lek Securities.

Even when FINRA, the Exchanges and the SEC began investigations into certain suspicious activity, Samuel Lek continued with these manipulative trading practices. Lek may have even provided office space, trading software, computer servers, and other services to the customer traders of this sub-account.

Nomura Securities International, Inc. (CRD #4297, New York, New York) – An AWC (Accept, Waiver & Consent) was issued in which Nomura Securities International, Inc. was fined $300,000 and censured by FINRA. The firm consented to the sanctions without confirming or denying the findings. FINRA found that the firm underwent system-wide coding related issues that caused them to exclude certain foreign-listed securities from its short interest submissions to FINRA. Nomura Securities International, Inc. is also believed to have inaccurately reported the short interest positions that they did submit to FINRA. 

Another issue was Nomura Securities International, Inc.’s alleged lack of supervisory oversight.  The firm may not have established a proper supervisory system.

If you lost money with Nomura Securities International, Inc. or any broker or brokerage firm, call us immediately to discuss your situation.  We are here to attempt to recover your investment losses. NO RECOVERY, NO FEE! Costs are additional.

(FINRA Case #2017053342601)

 Brian John Hussey Jr. (CRD #4640067, Zephyrhills, Florida) – An AWC (Accept, Waiver & Consent) was issued in which Hussey was suspended from association with any FINRA member in all capacities for seven months. In light of Hussey’s financial status, no monetary sanction has been imposed.

Without admitting or denying the findings, Hussey consented to the sanction and to the entry of findings that he made unsuitable recommendations to a customer that she sell 100 percent of the mutual fund positions in her individual retirement account (IRA) and invest the proceeds in penny stocks focused on the marijuana business.

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