Accelerated Capital Group, Inc. a brokerage firm headquartered in Costa Mesa, California, has been charged by Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that the firm failed to supervise its trading activities. Department of Enforcement v. Accelerated Capital Group, Inc., Disciplinary Proceeding No. 2012033566205 (Dec. 13, 2017).
According to the Complaint, between August 31, 2012 and February 25, 2016, the firm neglected to create and implement supervision systems and written protocols intended for compliance with FINRA rules and federal securities laws. Allegedly, the firm failed to provide adequate supervision of trading within its auspices to make sure that the transactions effected in customer accounts were authorized by them and had not been excessive or unsuitable.
The Complaint stated that the firm failed to adequately supervise switches of mutual funds, sales and exchanges executed by the firm’s staff. Additionally, the firm reportedly neglected to make sure that its stockbrokers made customers aware of breakpoint discounts that they may be entitled to by way of making mutual fund purchases. FINRA alleged that the firm ultimately failed to detect and take action when it discovered that its stockbrokers committed misconduct.
The Complaint further revealed that the firm’s supervision failures enabled one of its brokers, BM, to commit securities fraud, where customers became victim to BM’s unauthorized, unsuitable, and fraudulent trading and churning in the customers’ accounts. Apparently, BM’s fraudulent trading and charging of faulty sales loads cost BM’s customers more than $900,000.00. FINRA Department of Enforcement alleged that the firm’s conduct was violative of FINRA Rules 2010, 3110(a), 3110(b), 2111, as well as NASD Rules 3010(a) and 3010(b).
The Complaint additionally stated that Accelerated Capital Group, Inc. violated FINRA Rules 2010 and 4511 by way of its staff members in an Irvine, California office having utilized altered and pre-signed customer account documents in order to open customer accounts and effect distributions from them. Further, the firm allegedly violated FINRA Rules 2010 and 4530 by failing to notify FINRA that it took action to prohibit BM’s trading activities, and for failing to inform FINRA about a customer complaint lodged against another of the firm’s stockbrokers, JLS.
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