In its August report, the Financial Industry Regulatory Authority detailed a list of companies it has penalized for cases of misconduct.
On June 3, FINRA fined Nomura Securities International Inc. $225,000 for inaccurate reports of its over-the-counter options positions to the Large Options Position Reporting System and for submitting late reports of its options positions to the FINRA Trade Reporting Facility.
On June 7, FINRA imposed a $150,000 penalty on Robert W. Baird & Co. Inc. for failing to disclose that one of its research analysts who published seven research reports on a particular company was actually in employment discussions with that company.
FINRA fined Spencer Edwards Inc. on two occasions. It levied a $495,000 fine against the company on May 2 and suspended it from associating with FINRA from July 1 to Sept. 3 because it sold two-year convertible notes worth more than $400,000 in a private placement without having a reasonable basis for making the recommendations. The regulator said Spencer Edwards did not conduct adequate due diligence and presented misleading sales materials to potential investors.
FINRA then imposed a $250,000 fine on June 11 and ordered Spencer Edwards to pay $512,261 plus interest to customers because it failed to implement procedures designed to detect and report suspicious activities in its primary business, which is accepting and liquidating customers' deposits of micro-cap securities.
On June 10, the regulator levied a $200,000 penalty on Ross Sinclaire & Associates LLC for failing to disclose material facts as it assisted in the preparation and circulation of a confidential information memorandum to investors for a private placement of notes.
FINRA said the issuer of the notes was supposed to give the proceeds to a film production company "for the advance funding of anticipated state tax credits." The memorandum failed to disclose that Ross Sinclaire & Associates would take half of the profits of the sale and that a registered representative of the firm was also vice president of the issuer.
On the same day of the Ross Sinclaire & Associates penalty, FINRA fined U.S. Boston Capital Corp. $125,000 and ordered the company to review and revise systems and procedures regarding consolidated reports to ensure it is in compliance with FINRA regulations.
On June 20, FINRA ordered Citigroup Global Markets Inc. to pay $152,488.59 plus interest in restitution, which the firm has already paid, because it failed to apply sales charge discounts to certain eligible purchases of unit investment trusts.
On June 26, the regulator fined Axos Clearing LLC $250,000 for failing to have established procedures to assure customers received the initial margin interest rate disclosures and for failing to have a supervisory system in compliance with FINRA rules.
None of the companies admitted or denied FINRA's findings in their respective cases.
