Howard L. Hull III, of Newport Coast, California, a prior owner, vice-president, chief compliance officer, and financial and operations principal for HLH Securities, Inc., has been fined $20,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Hull, inter alia, failed to supervise outside business activities and private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2014038992501 (Aug. 8, 2017).
According to the AWC, between August of 2012 and January of 2014, during the period that Hull was responsible for all supervisory functions, the firm’s procedures did not require that its registered representatives furnish information and documentation about securities that the representatives effected away from the firm. Evidently, twenty-one securities transactions were effected outside the firm’s auspices; the transactions were neither supervised nor placed on the records and books of the firm. Consequently, FINRA found that Hull did not create and implement an adequate supervisory process for the private securities transactions and failed to supervise the transactions accordingly; conduct FINRA found to be violative of FINRA Rule 2010, as well as NASD Rules 3040(c) and 3010(a).
Moreover, FINRA found that Hull failed to fulfill his responsibilities of updating the firm’s outside business activities protocol to conform with FINRA’s requirements. Particularly, from July of 2012 to December of 2013, ten of the firm’s registered representatives apprised Hull of outside business activities for approval; yet, Hull failed to document the review of those activities. As a result, the AWC stated that Hull failed to develop adequate procedures for reviewing the outside business activities and ultimately neglected to supervise them. FINRA found Hull’s conduct to be violative of FINRA Rules 2010 and 3270, as well as NASD Rule 3010.
Hull’s registration with HLH Securities, Inc. was terminated as of September 2, 2015.
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