Monex Securities, Inc., of Houston, Texas, was censured and fined $25,000 by the Financial Industry Regulatory Authority (FINRA) after consenting to findings that the firm sold (or bought) corporate bonds to (or from) customers and failed to sell (or buy) such bonds at a price that was fair within six transactions. Letter of Acceptance, Waiver and Consent, No. 20130382992-01 (Oct. 22, 2015).
According to the AWC, the firm did not engage in fair transactions in consideration of all relevant circumstances, including market conditions with respect to each bond at the time of the transaction, the expense involved, and that the firm was entitled to a profit. FINRA found that the firm violated FINRA Rule 2010 and NASD Rules 2440, IM-2440-1 and IM-2440-2.
According to FINRA’s Rule 2440 (now superseded by Rule 2121), “in securities transactions, whether in “listed” or “unlisted” securities, if a member buys for his own account from his customer, or sells for his own account to his customer, he shall buy or sell at a price which is fair, taking into consideration all relevant circumstances, including market conditions with respect to such security at the time of the transaction, the expense involved, and the fact that he is entitled to a profit.”
Rule 2440 also states, “if the member acts as an agent for his customer in any such transaction, he shall not charge his customer more than a fair commission or service charge, taking into consideration all relevant circumstances, including market conditions with respect to such security at the time of the transaction, the expense of executing the order and the value of any service he may have rendered by reason of his experience in and knowledge of such security and the market therefor.”
In one transaction, a customer sold 188 CX.GM (CUSIP ID: G23491AA4) international bonds to the firm on May 21, 2013, at a price of $87, and at the same time and on the same day, the firm sold to another broker-dealer the bonds for a trade price of $90; causing the markdown of 3.33%. FINRA ordered that Monex provide restitution to this customer in the amount of $1,866.84.
In another transaction, a customer sold 400 CVGE3833307 (CUSIP ID: P3142CDD8) international bonds to the firm on June 12, 2013, at a price of $43, and at the same time and on the same day, the firm sold to another broker-dealer the bonds for a trade price of $45, causing the markdown of 4.44%. FINRA ordered that Monex provide restitution to this customer in the amount of $4,166.00.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost 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.
