Without admitting or denying the findings, Falla consented to the sanction and to the findings that he failed to disclose the use of non-market foreign exchange (FX) rates in connection with a series of bond swap transactions in retail customer accounts. Effective February 9, 2017 Falla barred from association with any FINRA member in any capacity.
The findings stated that Falla’s member firm, operating through Falla, executed numerous retail customer transactions with inaccurate valuations when converted into U.S. dollars, which affected multiple customer accounts.
The findings also stated that the firm’s confirmations and account statements did not disclose to customers the use of a non-market FX rate or the excessive nature of the markups in connection with the bond swap transactions. Falla did not disclose that he used non-market FX rates away from the spot rate to value retail customer bond transactions, and did not disclose to retail customers its impact on the valuation of the bond swap transactions.