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Articles Posted in FINRA

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.

Frank H. Black and his Firm Southeast Investments NC failed to comply with applicable securities laws by retaining business related emails and to establish, maintain and enforce, supervisory systems.

Southeast Investments N.C. which was established in 1997 and has close to 130 registered representatives, according to FINRA. Forty percent of the firm’s revenues are from sale of variable annuities; 40% from mutual funds; and most of the remaining 20% from real estate investment trusts, according to the FINRA panel.

September 2012, FINRA requested documentation records for Southeast Investments’ branch office inspections.  Mr. Black produced a three-page inspections calendar, listing 43 branch offices that he claimed he inspected between March 2010 and August 2012.

FINRA has made brokerage firm “culture” one of its top priorities for 2016. FINRA refers to “culture” as how management sets the bar for the firm and how culture effects their brokers interaction with clients and their business. According to FINRA, firm culture has a profound influence on how a broker-dealer conducts its business, including how it manages conflicts of interest. This is a new area FINRA is trying to investigate.

One way FINRA is looking into culture is to see if there are any forms of payments and commissions that could affect an employees behavior. FINRA is reaching out to the industry by seeing where firms stand versus enforcing strict “culture” rules on how a brokerage firm must act. Recently, FINRA sent more than a dozen firms 8 questions regarding their firms “culture.” The questions were the following:

” 1. A summary of the key policies and processes by which the firm establishes cultural values. In the summary, include whether this is a board-level function at your broker-dealer or at the corporate parent of the firm. If it is a board-level function, describe the board’s involvement. Also, provide a description of any steps you have initiated or completed in the past 24 months to promote, strengthen or change your firm’s culture.

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