Mercury Securities LLC, a brokerage firm located in San Rafael, California, was censured and fined $5,000.00 by Financial Industry Regulatory Authority (FINRA) based upon consenting to findings that the firm failed to supervise registered representatives’ private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2015043459301 (July 12, 2017).
According to the AWC, three of the firm’s representatives received approval by the firm to engage in outside business activities even though these activities were really private securities transactions that the representatives were paid for. Mercury Securities’ written supervisory procedures apparently required notification by the representatives of proposed activities in writing, wherein the firm was required to review and provide the representative with written authorization prior to the representative having engaged in the activities.
The AWC stated that the firm decided not to abide by its policies as evidenced by the firm’s failure to ascertain adequate information about the private transactions. Apparently, the firm did not reference any of the securities transactions that the representatives effected away from the firm. Consequently, the transactions were not placed on the firm’s records and books, and were not supervised as if the firm was the party to the transition. Consequently, FINRA found that the firm’s conduct was violative of FINRA Rules 2010, 3280, 3110, as well as NASD Rules 3040 and 3010.
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