Whitehall-Parker Securities Inc. and its supervisor Robert J. Yuloo both of San Rafael California have been sanctioned by Financial Industry Regulatory Authority (FINRA) supported by findings of Whitehall-Parker and Yuloo having failed to supervise its stockbrokers’ outside business activities. Letter of Acceptance Waiver and Consent No. 2017052705802 (Jan. 15, 2021).
According to the AWC, from September of 2015 to November of 2017, one of Whitehall-Parker’s stockbrokers had effected $1,467,000.00 in promissory notes sales. Those notes pertained to Woodbridge Group of Companies LLC. FINRA indicated that three Whitehall-Parker customers were among those who purchased the promissory notes because of the stockbroker.
FINRA stated that there was no point that the stockbroker tried to get authorization from Whitehall-Parker to effect the promissory notes sales although the stockbroker did disclose his involvement with Woodbridge as an outside busines activity. The stockbroker indicated that they were compensated from Woodbridge. Yuloo was even personally contacted by the stockbroker in regard to Woodbridge which placed him on notice of the stockbroker’s association with that enterprise.
There was no point in which Yuloo undertook an inquiry or investigation into Yuloo’s involvement with Woodbridge to determine if his activities constituted private securities transactions. Yuloo instead depended on the stockbroker’s word in May 2016 that they were not doing business with Woodbridge any longer. That stockbroker’s activities with Woodbridge continued until at least November of 2017. FINRA found that Whitehall-Parker and Yuloo violated FINRA Rules 2010 and 3270 in this respect.
FINRA also indicated that Yuloo neglected to reasonably supervise communications between March of 2015 and December of 2017. Written supervisory procedures necessitated Yuloo’s review of electronic communications. Yuloo reviewed no more than .14 percent of the emails. This precluded Yuloo from taking steps to further investigate the emails relating to Woodbridge. The regulator indicated that those emails would have raised red flags regarding the stockbroker’s selling away activities. FINRA determined that Whitehall-Parker and Yuloo violated FINRA Rules 2010 and 3110 in this respect.
Yuloo was suspended for two months from associating with any FINRA member in any principal capacity. The securities broker dealer and Yuloo were made jointly responsible for paying a $10,000.00 fine. Whitehall-Parker was also censured and ordered to pay an additional $30,000.00 fine.