Shearson Financial Services, LLC, headquartered in Boca Raton, Florida, was censured and fined $100,000.00 by Financial Industry Regulatory Authority (FINRA) after consenting to findings that the firm’s personnel had engaged in unauthorized discretionary trading and mismarking of order tickets. Letter of Acceptance, Waiver and Consent, No. 2015043417501 (June 21, 2016).
According to the AWC, FINRA issued the firm a Cautionary Action Letter on June 25, 2012, indicating that the firm’s personnel had marked 47 customer order tickets as unsolicited when the orders had factually been solicited. The AWC stated that the firm’s conduct persisted after the firm became aware of FINRA’s position regarding the mismarking of order tickets.
Apparently, from June 10, 2013, through October 6, 2015, as many as 1,873 customer transactions were solicited by eighteen of the firm’s stockbrokers as well as supervisory personnel when the transactions were claimed by the firm to be unsolicited. FINRA found the firm’s conduct to be in violation of Securities Exchange Act of 1934 Section 17(a), SEC Rule 17a-3, and FINRA Rules 2010, and 4511(a).
The AWC additionally stated that the firm engaged in the 15 discretionary trading account from June 10, 2013 through October 6, 2015. Apparently, fifteen of the firm’s stockbrokers engaged with unauthorized discretion with respect to 56 customer accounts, in an estimated total of 231 transactions.
In these cases, customers reportedly did not provide the firm’s personnel with written approval. Further, the AWC stated that the accounts had not been deemed discretionary by the firm. As such, FINRA found the firm’s conduct to be in violation of FINRA Rules 2010 and 2510(b).
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