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FINRA reports disciplinary actions against brokers/dealers

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FINRA reports disciplinary actions against brokers/dealers

The Financial Industry Regulatory Authority disclosed disciplinary actions taken against broker/dealers in January. None of the companies listed below admitted or denied the agency's findings.

Cantor Fitzgerald & Co. was censured and fined $130,000, as it failed to report information regarding purchase and sale transactions effected in municipal securities to the real-time transaction reporting system in the manner prescribed by Municipal Securities Rulemaking Board Rule G-14 real-time transaction reporting system procedures and the real-time transaction reporting system users manual.

FINRA censured and fined Cowen Execution Services LLC $100,000 and required to revise its written supervisory procedures after it transmitted reports that contained inaccurate, incomplete, or improperly formatted data to the Order Audit Trail System.

SG Americas Securities LLC was fined $200,000 and was required to report to a FINRA trade reporting facility the transactions that were not previously media reported, pay the regulatory transaction fees as billed and revise its written supervisory procedures. FINRA found that SG Americas reported transactions to the FINRA/Nasdaq trade reporting facility with inaccurate prior reference price modifier timestamps and failed to media report buy transactions that it reported to FINRA/Nasdaq trade reporting facility with the prior reference price modifier.

As a result of the firm's failure to media report these transactions, the firm was not assessed Section 31 of the Securities Exchange Act of 1934 fees for the transactions.

Hancock Investment Services Inc. was censured and fined $100,000. The agency found that the company failed to preserve business-related emails in a manner that complied with applicable federal securities laws and FINRA/NASD rules. The findings also stated that until February 2012, the company did not establish or maintain any designed written supervisory procedures to ensure that its method of electronically preserving business-related emails complied with applicable securities laws and regulations and applicable FINRA rules.

FINRA censured and fined Jefferies LLC $150,000 as it failed to hold customers' fully paid and excess margin securities in good control locations. The findings stated that from July 2013 through March 2016, Jefferies held fully paid and excess margin securities belonging to four firm customers in a clearance account at a foreign depository in Greece. All of the securities held in the Greece clearance account were subject to a general lien by the Greece foreign depository, rather than a lien limited for their particular safe custody or administration.

Merrill Lynch Pierce Fenner & Smith Inc. was censured and fined $525,000 by FINRA, after the agency found an undetected system logic error in the firm's internal short interest report that dropped certain symbols involved in recent corporate actions that resulted in mergers and an exchange of shares, between July 15, 2013, and Dec. 31, 2013. As a result, the company failed to report short interest positions on nine settlement dates, and inaccurately reported short positions on eight settlement dates.

Windsor Street Capital LP, formerly known as Meyers Associates LP, was fined $500,000 after FINRA found that the firm failed to adequately supervise its Chicago office and failed to establish and implement adequate anti-money laundering policies and procedures reasonably designed to detect and cause the reporting of suspicious transactions. The findings stated that the firm failed to adequately supervise a representative's efforts to increase the reported price and trading volume of the common stock of a financially distressed company that traded on the over-the-counter bulletin board. The sanctions are not in effect pending review.

Huntleigh Securities Corp. was censured and ordered to pay $98,252.33, plus interest, in restitution to customers. FINRA found that Huntleigh Securities failed to identify and apply sales-charge discounts to certain customers' eligible purchases of unit investment trusts, resulting in the affected customers paying excessive sales charges of $47,591 for those transactions. The findings stated that the company has since paid full restitution, with interest, to the affected customers.