trending Market Intelligence /marketintelligence/en/news-insights/trending/dWNp4QCCvuKXeWW6FRj4ZQ2 content esgSubNav
In This List

FINRA releases disciplinary action summary for July


Insight Weekly: Bank oversight steps up; auto insurers’ dismal year; VC investment slumps


Banking Essentials Newsletter: 3rd May Edition


Banking Essentials Newsletter: 19th April Edition


According to Market Intelligence, April 2023

FINRA releases disciplinary action summary for July

FINRA took disciplinary actions against certain companiesand individuals for various violations, according to its summary ofdisciplinary and other actions for July.

The regulator expelled Dratel Group Inc. from FINRA membership and barredWilliam Dratel from association with any FINRA member in any capacity. Theyallegedly participated in a fraudulent trading scheme and failed to disclosematerial information to discretionary customers. The actions resulted in lossesfor the discretionary customers and earnings for William Dratel, who wasrequired to disgorge profits of $489,000, plus prejudgment interest.

EquinoxSecurities Inc. was also expelled from FINRA membership overallegations that it excessively traded customer accounts without their consent.CEO Stephen Oliveira was fined $25,000, barred and suspended from associationwith any FINRA member for failing to supervise the representative who engagedin fraudulent misconduct and executed the excessive trading that resulted inlosses for the customers.

WedbushSecurities Inc. was fined $1 million for submitting incomplete andinaccurate blue sheets to the SEC and FINRA. The company also allegedly failedto set up an audit system providing for accountability regarding inputting ofrecords and the information entered into its blue sheet responses.

FINRA fined Barclays Capital Inc. $600,000 after a programming errorin a firm algorithm caused it to splice parent short sale orders into childorders marked as long sales. The company executed short exempt transactions andreported the transactions as nonexempt short sales in nontape reports to theTrade Reporting Facility.

CanaccordGenuity Inc. was fined $200,000 for allegedly omitting from itsresearch reports required conflict of interest disclosures regarding itsexpectation of receiving or intent to seek compensation for investment bankingservices, and omitting required disclosures from its research reports relatedto an analyst's financial interest in a subject company.

Feltl &Co. was fined $250,000 for failing to identify and applysales-charge discounts to certain customers' eligible purchases of unitinvestment trusts. As a result of the failure, customers paid excessive salescharges of approximately $261,873. The company has paid restitution to allaffected customers.

The regulator fined Hapoalim Securities USA Inc. $200,000 and asked it torevise its Anti-Money Laundering Compliance Program. The company allegedly didnot have adequate risk-based procedures and controls that could detect andreport known or suspected money-laundering activity.

KovackSecurities Inc. was fined $125,000 and ordered to pay $119,319.27in restitution to customers. The company failed to give sales charge discountsto customers' eligible purchases of unit investment trusts, resulting inexcessive sales charges for the customers.

UBS SecuritiesLLC was fined $110,000 for erroneously telling customers in writtennotifications that it acted in agency capacity in transactions when it acted ina riskless principal capacity. The inaccurate capacity designations resultedfrom a systems configuration error when the company's trading desk switchedorder management systems.

The companies consented to the sanctions and to the entry offindings without admitting or denying the findings.