Halifax America LLC a brokerage firm headquartered in Sherman Oaks California has been censured and fined $60,000.00 by Financial Industry Regulatory Authority (FINRA) based in part on findings that the firm neglected to create and implement supervision systems with a view towards ensuring brokers’ transactions in customer accounts had been properly reviewed by the firm for suitability and excessive trading. Letter of Acceptance Waiver and Consent No. 2015045780901 (Mar. 6, 2019).
According to the AWC, from October of 2015 to February of 2016, written supervision procedures utilized by the firm mandated that its principals make a review each quarter for, inter alia, excessive frequency or size of trades; suitability of transactions executed in customer accounts; and large trading losses. Evidently, the firm failed to monitor the transactions in the manner set forth by its own written supervisory procedures. Moreover, the firm’s reviews failed to satisfy its duty to adequately monitor its brokers’ activities.
The AWC stated that there were no reviews executed by the firm to determine if the brokers’ transactions were suitable for customers; and the firm neglected to monitor transactions to determine if accounts were churned or if customers were charged excessive commissions. Evidently, the firm’s lack of appropriate supervisory controls led to eleven hundred accounts being unmonitored from October of 2015 to February of 2016.
FINRA revealed that at least five customers of the firm contained annual turnover rates which demonstrated that excessive trading took place in their accounts. Consequently, FINRA found that the firm’s supervisory failures were violative of FINRA Rules 2010 and 3110.
