J.P. Turner & Company, based in Atlanta, Goeorgia, was censured and fined $140,000 by Financial Industry Regulatory Authority (FINRA) after consenting to findings that the firm had not charged customers prices that were fair and reasonable in the purchase/sale of securities. Letter of Acceptance, Waiver and Consent, No. 20130358778 (Nov. 25, 2015).
According to the AWC, FINRA’s Fixed Income Investigations Team of the Department of Market Regulation had reviewed the firm’s compliance with Municipal Securities Rulemaking Board Rules G-17, G-27, and G-30 from October 1, 2012 – March 31, 2013. FINRA found that during the relevant period, there were seventy-two transactions where the firm had bought and/or sold municipal securities for its own account and from and/or to a customer at an aggregate price, inclusive of mark-ups or mark-downs, that was not fair and reasonable. According to MSRB Rule G-17, each broker, dealer, municipal securities dealer and municipal advisor must deal fairly with all persons and not engage in deceptive, unfair, and dishonest practices.
Also, in connection with STAR No. 20130388701, FINRA’s staff reviewed the firm’s compliance with MSRB Rules G-17, G-27, and G-30 from July 1, 2013 – September 30, 2013. FINRA found that during this period, in ten transactions, the firm had sold securities for its own account to a customer at an aggregate price (inclusive of mark-up or mark-down) that was not fair and reasonable.
For example, on March 28, 2013, a customer bought 160,000 of Puerto Rico – Commonwealth Highway and Series A National IBC municipal bonds (CUSIP: 745190DH8), where the firm charged a mark-up of 5.39%, amounting to $7,712.00.
In both cases, FINRA took into consideration the best judgment of the firm as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction, the expense involved in effecting the transaction, the fact that the firm is entitled to a profit, and the total dollar amount.
The AWC also indicated that the firm’s supervisory system did not provide for supervision which would reasonably be designed to ensure compliance of securities laws and regulations and MSRB rules concerning fair pricing of municipal securities. FINRA found the firm’s conduct to be in violation of MSRB Rule G-27 in this regard. FINRA ordered the firm, in addition to paying the $140,000 fine, to pay total restitution to the firm’s customers in the amount of $76,843.68 plus interest.
This is not the first time that J.P. Turner & Company was cited for this type of misconduct. On July 18, 2013, the firm was subject to a censure and a $5,000 fine after consenting to findings that they had violated MSRB Rules G-17 and G-30. Letter of Acceptance, Waiver and Consent, No. 20090207655 (July 18, 2013).
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.