Pruco Securities, LLC (CRD #5685, Newark, New Jersey) and Prudential Investment Management Services LLC (CRD #18353, Newark, New Jersey) submitted a Letter of Acceptance, Waiver and Consent in which they were censured, fined $525,000, jointly and severally, and required to conduct an audit and prepare written findings regarding their compliance with NASD rules relating to the filing, approval and record keeping requirements for advertisements and sales literature.
Without admitting or denying the findings, the firms consented to the described sanctions and to the entry of findings that they committed numerous separate violations of NASD rules, including failures to file advertisements and sales literature in a timely manner with NASD, failures to have a registered principal approve advertisements and sales literature prior to use with the public, and failures to comply with their recordkeeping obligations for communications with the public.
NASD’s Findings
The findings stated that the firms failed to establish, maintain and enforce supervisory systems and procedures reasonably designed to achieve compliance with NASD rules governing filing, approval and record keeping with respect to advertising and sales literature. The findings also stated that the firms failed to file pieces in a timely manner with NASD, and lacked adequate systems and procedures to monitor the timeliness of NASD filings. The findings also included that the firms failed to take sufficient remedial actions in response to written warnings from NASD that its filings were not timely.
NASD found that the firms used advertisements with the investing public before a registered principal approved the sales literature for use that went largely undetected by the firms, as they had no systems or procedures to record when advertisements were first used with the public, and their systems and procedures to detect when advertisements were used prior to the requisite internal approval were not adequate.
NASD also found that the firms failed to create and maintain reliable records of when advertisements were approved by a principal, and a flaw in their computer system caused inaccurate approval date records to be created and maintained. In addition, NASD determined that the firms failed to retain records of filings with NASD’s Advertising Department and filed inaccurate dates of principal approval with NASD.
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, Esq., 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.
